DoorDash’s (NYSE:HYPHEN) huge and rapidly growing market share, improving financial results and promising initiatives leave DASH stock well positioned to outperform the stock Nasdaq and the S&P500 in the medium and long term. Therefore, I urge growth investors to buy DoorDash shares after they have fallen more than 20% since April 4.
DoorDash’s U.S. market share skyrocketed only 16% in 2018 to a whopping 53% in 2021. This strong and rapid growth is encouraging, not only because it has helped improve the company’s financial results, but also because it indicates that American consumers have been, in general , very satisfied with the company’s delivery service and its selection of restaurants and stores.
As I pointed out in a previous column“in 2021, DoorDash’s cash flow from operating activities to $692 million, from $252 million in 2020.” And in the fourth quarter (Q4) of 2021, despite coronavirus fears easing, the company revenue jumped to $1.3 billion, down from $970 million.
Also in the fourth quarter, DoorDash’s gross profit jumped to $637 million from $477 million in the same period a year earlier. In addition, its gross margin remained unchanged at 49%. Finally, its net loss improved to $155 million in the fourth quarter from $312 million in the year-ago period. Clearly, DoorDash is growing rapidly while its profitability is rapidly improving.
Multiple initiatives with great potential
March 28, Big BJ club (NYSE:bj), a major wholesale club, announced that he would launch an alliance with Door Dash. As a result of this agreement, BJ’s will become the first wholesale club to offer its products on DoorDash. Given the vast varieties and quantity of products available at major wholesale clubs, the deal will make DoorDash very attractive to many consumers.
DoorDash’s deal with BJ’s came after the delivery company in February made a similar agreement with Albertsons companies (NYSE:AIT), a large chain of grocery stores. With this latest deal, DoorDash says it will be able to provide “convenient delivery of fresh groceries in less than 30 minutes,” reported another InvestorPlace columnist, Chris Lau.
If DoorDash is able to sign deals with several other major retail chains like BJ’s and Albertson’s and deliver their products within an hour, the delivery company will start to take a significant market share. from instagram and even Amazon (NASDAQ:AMZN). After all, this latest tech giant hasn’t been able to offer sub-hour deliveries yet.
DoorDash’s multiple strengths combined with its gigantic potential make DASH stock very attractive to long-term growth investors.
As of the date of publication, Larry Ramer had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.