DoorDash (NASDAQ:DASH) stands as the frontrunner in the food delivery service industry. The DoorDash app serves as a platform connecting customers with local restaurants, allowing them to peruse menus, check reviews, place orders, and have food delivered to their doorstep swiftly. The company collaborates with a diverse array of restaurants, providing users with an extensive selection of cuisines and dining choices. DoorDash operates through a network of independent contractors known as Dashers, who efficiently pick up restaurant orders and deliver them to customers.
Growing Revenues through Partnerships
DoorDash consistently invests in expanding its partner network to enhance options on its on-demand delivery platform. Recent partnerships extend beyond traditional restaurants to include grocers such as Sprouts Farmers Market and Aldi, as well as retailers like Dick’s Sporting Goods, Big Lots, and Grocery Outlet. The expanded partnership with Aldi, allowing customers to order alcohol, presents a significant potential revenue stream. With a continuous influx of new partnerships, DoorDash anticipates substantial growth in total orders and revenue.
Capitalizing on the New Economy
The shift in consumer behavior due to the COVID-19 pandemic has created an environment conducive to the growth of on-demand services like DoorDash. Initially driven by lockdowns and social distancing, the trend of increased reliance on food delivery persists. As remote work gains prominence in the “new economy,” DoorDash stands to benefit, with more individuals opting for food delivery while working from home. Additionally, the company may attract more Dashers seeking flexible employment opportunities to fulfill delivery demands.
Surpassing Wall Street Expectations
While DoorDash missed Wall Street expectations in its initial eight quarters as a public company, it has since reversed this trend. The company has surpassed expectations in three out of the last four quarters, including an impressive 57.78% surprise in the latest quarter. The positive turnaround story has garnered increased bullish sentiment from analysts.
Attractive Technical View
DASH shares are retracing to their 10-week moving average after a notable breakout in November. The first pullback to the 10-week moving average post-breakout typically provides traders with an attractive reward-to-risk zone. Furthermore, this week, shares are breaking out from a classic weekly bull flag.
Conclusion
DoorDash’s strategic expansion and adaptability to the “new economy” position it as a leader in the food delivery service industry. The company’s continuous efforts to forge non-traditional partnerships are expected to drive revenue growth, and the evolving work landscape supports its long-term prospects.
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