Should You Buy, Sell or Hold DoorDash Stock at P/S of 5.94X?

DoorDash (DASH Quick QuoteDASH – Free Report) shares are currently overvalued, as suggested by its Value Score of F. 

In terms of the forward 12-month Price/Sales ratio, DASH is trading at 5.94, higher than its median of 5.12 and the industry’s 4.75.

Price/Sales (F12M)

Image Source: Zacks Investment Research

However, DoorDash’s shares have rallied 13.2% in the year-to-date period, significantly outperforming the Zacks Internet – Services industry’s decrease of 11.3% and the broader Zacks Computer & Technology sector’s decline of 8.2%.

DASH Outperformed Sector, Industry

Image Source: Zacks Investment Research

The outperformance can be attributed to strong order growth and rising Marketplace GOV, along with enhanced logistics efficiency and a growing contribution from advertising.

Can DoorDash sustain its strong order growth and rising Marketplace GOV to justify its premium valuation?

DoorDash Expands Partners to Boost Grocery Delivery Reach

DoorDash is benefiting from an expanding clientele, which has enhanced its order volume and resulted in a year-over-year increase of 19% in the fourth quarter of 2024. The metric reached a total of 685 million orders. The marketplace GOV also experienced robust growth of 21%, totaling $21.3 billion, reflecting strong demand across platforms.

DoorDash’s expanding partner base has been noteworthy. It includes Ibotta (IBTA Quick QuoteIBTA – Free Report) , Walmart’s Canadian division Walmart Canada, Wegmans Food Markets, Lyft, Warner Bros. Discovery’s streaming service, Max, and JPMorgan Chase & Co.’s U.S. consumer and commercial banking division, Chase, which have acted as catalysts for growth, significantly broadening DoorDash’s reach and enhancing its service offerings.

In January, DASH partnered with Ibotta to integrate the latter’s extensive catalog of digital promotions into DoorDash’s platform. This offers customers personalized savings across various categories while providing CPG brands with enhanced opportunities to reach consumers through DoorDash’s 115,000+ non-restaurant stores through the Ibotta Performance Network’s AI-driven pay-per-sale promotions.

Through DoorDash Canada and Walmart Canada’s nationwide collaboration, Canadians now have access to grocery and general merchandise from over 300 Walmart Supercenters via DoorDash’s app and website. This initiative strengthens DoorDash’s grocery delivery presence and underscores its ability to facilitate seamless shopping experiences beyond traditional restaurant partnerships.

DASH Grows With Home Depot Partnership for Quick Delivery

DoorDash has expanded its offerings beyond restaurants, such as launching its commerce platform and growing its presence in grocery delivery and other local commerce categories. The success in expanding to new verticals has contributed positively to revenue and market shares.

Building on this success in January, DASH announced a partnership with The Home Depot (HD Quick QuoteHD – Free Report) , enabling on-demand delivery of home improvement essentials directly through the DoorDash app. 

The collaboration with Home Depot allows customers and professionals to have products delivered in as little as an hour, enhancing convenience for DIY projects and job sites. With more than 115,000 non-restaurant stores available, DoorDash continues to expand its marketplace, offering a variety of products beyond food.

Earnings Estimate Revisions Show Upward Trend for DASH

For 2025, the Zacks Consensus Estimate for earnings is pegged at $2.23 per share, indicating a 2.2% increase over the past 30 days. The figure implies a year-over-year increase of 668.97%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The Zacks Consensus Estimate for 2025 revenues is pegged at $12.95 billion, suggesting an increase of 20.79% from 2024’s estimated figure of $10.72 billion.

DoorDash Faces Rising Competition as Grubhub Expands Reach

DoorDash’s strong portfolio and expanding partner base continuously contribute to its growth prospects, driving top-line growth. However, this growth is challenged by the highly competitive environment in its largest segment, local food delivery logistics.

The market is extremely fragmented, and DoorDash is constantly battling for market share with other local food delivery logistics platforms such as Uber Eats and Grubhub (JTKWY Quick QuoteJTKWY – Free Report) . As competition intensifies, companies are seeking new ways to differentiate themselves and expand their market presence.

In February 2025, Grubhub took a significant step in differentiating itself by partnering with Walgreens to add Walgreens and Duane Reade locations nationwide to its marketplace. 

This partnership provides customers with access to 15,000 items, including beauty products, health essentials, snacks, and household items, for on-demand delivery. As part of Grubhub+, members enjoy benefits such as $0 delivery fees, lower service fees, and exclusive discounts on eligible orders, further enhancing the company’s competitive edge in the market.

Conclusion

DoorDash currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a more favorable entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.