DoorDash is the featured company in today's IBD 50 Stocks To Watch, as the food delivery player nears a buy point. On track for a four-day winning streak, DASH stock surged above the 50-day line on Tuesday and moved higher Wednesday.
DoorDash is close to a buy point of 85.38 from a double-bottom base, according to IBD MarketSmith. Its move above the 50-day line in high volume suggests fund managers are supporting the stock. More funds have been buying DASH stock over the past eight quarters, earning the stock a strong Accumulation/Distribution Rating of B-.
Technical ratings could do with some improvement for this growth stock, however. The Composite Rating is 76 while the EPS Rating lags at 44. But its Relative Strength Rating is a high 96 out of a best-possible 99, shooting up from just 7 a year ago. And the stock's performance underscores that rating, with DoorDash stock up 68% so far this year.
DASH Stock: Steady Sales Growth
Sales growth has been steady for the past eight quarters and has ranged between 30% and 40%. But the company has not had a profitable quarter during the period.
In the most recent quarter ended June 30, sales grew 33% to $2.1 billion while losses per share of 44 cents showed an improvement from a 72-cent loss in year-ago quarter.
Marketplace GOV, which is a measure of the total dollar value of completed orders, grew 26% to $16.5 billion. For DoorDash's fiscal third quarter, which ends Nov. 1, the company expects Marketplace GOV of $16 billion at the midpoint. It sees earnings before interest, taxes, depreciation and amortization at $245 million, also at the midpoint.
Strong Fund Ownership
DoorDash went public in December 2020 above an initial proposed price of $75-$85. Shares popped on the first day of trading on the New York Stock Exchange and reached an all time high of 257.25 in November 2021. DASH moved to the Nasdaq on Sept. 27.
The company started out as a food delivery technology platform. It has expanded to grocery and non-restaurant services as well, with operations across 25 countries.
Mutual funds own 50% of outstanding shares, including the Harbor Disruptive Innovation Fund (HAMGX). Exchange traded funds holding the stock include the Invesco Nasdaq Internet ETF and the iShares Morningstar Mid-Cap ETF.
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