3 Reasons to Avoid the DoorDash IPO and Other Food Delivery Stocks
Jeremy Bowman, 11 December 2020
It’s a great time to be a DoorDash (NYSE: DASH) insider. Shares of the hot food delivery start-up jumped 86% on its IPO day, rising off of an already elevated listing price. The eye-popping surge comes as restaurant delivery apps have been among the big winners during the pandemic and amid speculation of a broader bubble in tech stocks.
Still, at a valuation around $72 billion now, double that of well-established restaurant chains like Chipotle, for example, it seems too hard to justify DoorDash’s market cap. The company is still unprofitable, even as it’s experienced significant tailwinds from the pandemic. Beyond valuation concerns, there are a number of other reasons to avoid DoorDash and its food delivery peers.
