The booming food delivery market, driven by hyperlocal expansion and improved operational efficiency, is creating significant investment opportunities. Industry leaders like Uber Technologies, Inc. (UBER), DoorDash, Inc. (DASH), and Olo Inc. (OLO) are leveraging technology and localized strategies to address rising consumer demand for faster, more efficient delivery services. As the global food service sector expands, these companies are well-positioned for growth, making them compelling prospects for investors.
The rapid growth of urban areas and the expanding middle class have driven a surge in demand for convenient dining options. As busy lifestyles create a greater need for efficiency, online food delivery services have flourished, with customers increasingly opting to order from a wide variety of restaurants at the touch of a button.
Narrowing the focus, a key emerging trend is the hyperlocal expansion of food delivery services. Companies are targeting specific neighborhoods and areas within cities to shorten delivery times, boost operational efficiency, and elevate customer satisfaction. As a result, the global food service industry is projected to grow to $4.43 trillion by 2028 at a CAGR of 9.9%.
Considering these conducive trends, let’s examine the food delivery stocks in detail.
Uber Technologies, Inc. (UBER)
UBER is a global technology platform offering mobility, delivery, and freight solutions. It connects end-users with transportation options, food and retail deliveries, and logistics services, catering to consumers, retailers, and businesses across regions worldwide.
On October 29, 2024, UBER announced it would now accept SNAP EBT payments, making nutritious food more accessible to millions of Americans. This initiative includes partnerships with major grocery giants to make payment options for eligible grocery and pharmacy items.
On October 3, UBER announced a multiyear partnership with Avride to integrate Avride’s autonomous vehicles and delivery robots into Uber and Uber Eats services. This collaboration aims to expand Avride’s robotic fleet within Uber Eats by 2025 and introduce a robotaxi service, enhancing the convenience of autonomous delivery and transportation for users.
During the fiscal third quarter that ended September 30, 2024, UBER’s revenue increased 20.4% year-over-year to $11.19 billion. Its income from operations grew 169.3% from the year-ago value to $1.06 billion. In addition, the net income attributable to Uber Technologies, Inc. came in at $2.61 billion and $1.20 per share, up 1081.9% and 1100% over the prior-year quarter, respectively.
Analysts expect UBER’s revenue for the quarter ending December 31, 2024, to increase to $11.78 billion by 18.5% year-over-year. The EPS for the same period is expected to be $0.50. It surpassed the Street EPS and revenue estimates in three of the trailing four quarters.
Over the past year, the stock has gained 26.6% to close the last trading session at $69.33. It soared 12.6% year-to-date.
UBER’s POWR Ratings reflect its robust outlook. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
UBER has an A grade in Sentiment and a B grade in Quality. It is ranked #42 out of 78 stocks in the B-rated Technology - Services industry.
Beyond what we have stated above, we also have given UBER grades for Growth, Value, Momentum, and Stability. Get all the UBER’s ratings here.
DoorDash, Inc. (DASH)
DASH is a global platform that links merchants, consumers, and contractors, offering marketplaces (DoorDash, Wolt), membership products (DashPass), delivery fulfillment (Drive), and e-commerce tools (Storefront, Bbot) to support order fulfillment, customer acquisition, and digital ordering solutions.
On October 30, 2024, DASH and Lyft, Inc. (LYFT) partnered to offer shared benefits: DashPass members receive monthly rideshare perks, and eligible Lyft riders get a free DashPass trial. This partnership enhances value for DashPass users with added savings on rides alongside delivery benefits.
On October 8, DASH expanded its partnership with Wegmans to offer grocery delivery from all Maryland locations, with more states to follow. This addition complements their existing Wegmans Meals 2GO service, broadening DoorDash's grocery offerings.
In the fiscal third quarter ended September 30, 2024, DASH’s revenues increased 25% year-over-year to $2.71 billion. It reported income from operations of $107 million, compared to a loss of $108 million in the year-ago quarter. Moreover, net income attributable to DoorDash, Inc. common and net income per share attributable to DoorDash, Inc. Class A and Class B common stockholders stood at $162 million and $0.38, respectively, from a loss compared to that of the prior-year quarter of $73 million and $0.19, respectively.
Street expects DASH’s revenue and EPS for the quarter ending December 31, 2024, to increase 121.1% and 23% year-over-year to $2.83 billion and $0.93, respectively. It surpassed the consensus EPS estimates in all of the trailing four quarters, which is impressive.
The stock climbed 74.7% year-to-date and 80.4% over the past year, to close the last trading session at $172.73.
DASH’s POWR Ratings reflect strong prospects. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.
It has an A grade for Growth and a B for Sentiment and Quality. It is ranked #8 out of 25 stocks in the Internet - Services industry.
To access DASH’s Momentum, Stability, and Value ratings, click here.
Olo Inc. (OLO)
OLO provides a SaaS platform supporting U.S. restaurants' digital operations, including ordering, delivery, and payment solutions. Its offerings include “Order” for managing digital orders and delivery, “Engage” for marketing and guest relationship enhancement, and “Pay” for secure, streamlined payment processing with fraud prevention.
On November 7, 2024, OLO announced a new menu integration with ezCater aimed at simplifying catering menu management for restaurants. This partnership enhances catering operations, offering restaurants a growth opportunity with larger order sizes and potential for repeat business, while improving guest experiences.
OLO’s total revenue increased 24.3% year-over-year to $71.85 million in the fiscal third quarter that ended on September 30, 2024. Its non-GAAP operating income grew 44.9% from the year-ago value to $8.23 billion. Its non-GAAP net income came in at $10.39 million, up 37.4% year-over-year, while its non-GAAP net income per share attributable to Class A and Class B common stockholders grew 50% from the year-ago value to $0.06.
Street expects OLO’s revenue for the fiscal fourth quarter (ending December 2024) to increase 15.5% year-over-year to $72.75 million. Its EPS for the same quarter is expected to grow 33.3% from the prior year to $0.07. In addition, it surpassed the consensus EPS and revenue estimates in each of the trailing four quarters.
Shares of OLO have gained 26.8% over the past year and 12.4% year-to-date to close the last trading session at $6.43.
OLO’s bright prospects are apparent in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
It has an A in Sentiment and a B grade for Growth. Within the A-rated Software - SAAS industry, it is ranked #10 out of 18 stocks.
Click here to see OLO’s ratings for Momentum, Value, Stability, and Quality.
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UBER shares fell $0.47 (-0.68%) in premarket trading Tuesday. Year-to-date, UBER has gained 12.60%, versus a 24.91% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
3 Food Delivery Stocks Capitalizing on Consumer Trends StockNews.com
