DoorDash Keeps On Partnering

According to a press release on Monday, DoorDash Inc DASH has partnered with plant-based meat company Beyond Meat Inc BYND to sell grilling kits in the days leading up to the Fourth of July. On Tuesday, DoorDashs' shares increased 4.7% as Wells Fargo raised its price target from $170 to $215. The new price target is Wall Street high. Only last week, DoorDash made its biggest splash in grocery yet, announcing that it's delivering from nearly 2,000 Albertsons stores in as little as an hour.

Partnerships

The holiday-themed partnership with Beyond Meat who is making efforts to plant its brand in online food delivery intensifies DoorDash's push to grab attention from e-commerce providers like Instacart and Shipt that dominate the grocery-delivery space. The online food delivery company also partnered with PetSmart to offer customers on-demand, same-day delivery of pet supplies.

The Goal Is For Shoppers To Associate The Brand And App With Items Sold By Supermarkets

DoorDash's grocery delivery chapter in 2020 came just weeks after the company unveiled its convenience-focused DashMart service, which provides delivery of a range of products in as little as half an hour in more than 25 cities.

Latest Earnings Report

One month ago, stock fell after the company's first earnings report since going public. The fiscal Q4 2020 managed to beat analyst revenue estimates but included a large net loss in its first release as a public company. Its revenue for the quarter marked a 226% YoY growth as it amounted to $970 million, exceeding $938 million expected. But unadjusted loss per share amounted to $2.67.

The Competitive Landscape

Although YoY sales in online grocery are starting to fall, overall usage remains significantly higher than before the pandemic. This trend is fueling up rapid-fire developments from e-commerce providers. In addition to both Instacart and DoorDash expanding their presence, Uber Technologies Inc's UBER which launched grocery delivery last summer, recently announced it has acquired the remainder of delivery firm Cornershop.

Other food delivery companies like Grubhub, Postmates, and Uber Eats had their most successful year to date, raking in record revenues, yet all of them have yet to reach profitability. It was only DoorDash, the largest third-party food delivery company in America and the nation's leading last-mile logistics platform,  that managed to step out of the red last year, but only for one quarter.

How Did DoorDash ‘Win' The Delivery Wars?

DoorDash's competitive advantage comes from being built from the ground up as a logistics company that helped restaurants launch their own delivery services. Second, it focused on gaining customers in places where Grubhub didn't dominate yet so as a result, it snitched major markets from Grubhub that maintained its lead in NYC.

Third, DoorDash remained private for much longer than Grubhub, which went public in 2014, allowing it to worry less about it not to worry about the stock price or profitability. According to Second Measure, DoorDash controlled 57% of the U.S. food delivery market in May, followed by merged Uber Eats and Postmates who own 21% with Grub taking third place at 17%.

Outlook

As for the path ahead, DoorDash's growth rates are astounding  but it told expects some of the tailwinds it experienced from stay-at-home orders across the U.S. to turn once the pandemic fades into history. It could also be challenged by Just Eat Takeaway GRUB, the European food delivery giant that just gobbled up Grubhub for $7.3 billion. In other words, a pricing war could be on the horizon. Although it generated 99.6% of its sales last year from the US, DoorDash claims it can continue growing overseas after already entering Canada, Australia, and Japan.

It also faces ongoing pressure to raise its wages and reclassify its Dashers from independent contractors to employees which would cause its operating expenses to skyrocket. All the above challenges will make it harder to ever generate a generally accepted accounting principles (GAAP) profit. Although its net loss narrowed from 2019's $668 million to $461 million in 2020 and narrowed YoY from $129 million to $110 million in the first quarter of 2021, by the looks of it, it won't turn to profitability any time soon.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you're interested in becoming an IAM journalist contact: contributors@iamnewswire.com

Image Sourced from Pixabay

The post DoorDash Keeps On Partnering appeared first on IAM Newswire.