Here’s Why DoorDash Stock Will Do Well in a Post-Pandemic World

Stocks to buy

Many investors believed that companies like DoorDash (NYSE:DASH) would not do well once the pandemic ended. However, DASH stock will buck the trend in the long run despite having fallen almost 50% year-to-date.

The company’s latest earnings report is filled with stellar numbers. Customers are becoming more reliant on convenience and are demonstrating a trend toward enjoying in-home deliveries, which will not let up, even with restaurants opening up. It is an important litmus test for DASH moving forward. The company will likely have to adjust once again.

So far, DoorDash has done pretty well. The price of DASH stock has been going up, and there’s more momentum left for the company to advantage.

DASH Stock Will Excite You After the Sharp Correction

DoorDash made $1.46 billion in revenue in its first quarter this past year, up 35% from last year. Consumers enjoy the convenience of being able to order food online, anywhere. They can even request a favorite dish delivered to their home rather than needing to make the trip out.

Company data shows that transaction volume increased year-over-year — in fact, the company had a 23% increase in average customer orders. Considering restaurants now function as per normal, this is great news.

However, one of the things that a company has to ensure is that it can control costs. In its latest earnings report, its operating loss rose from $110 million to $167 million. This is because DASH is investing a lot of money to make its clients happy. Consumers are valuing DoorDash because it is the cheapest option. If the company increases the prices to make up for costs, transaction value could fall sharply.

While it may not look too good now, many people are betting on the company to turn its fortunes around. There are many potential buyers and investors out there who want to buy more shares. It’s important to understand that you should never make investment decisions solely on a single number. Therefore, although the operating loss is substantial, the company can more than cover this by reducing expenses and growing its topline aggressively.

On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.

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