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Stock DASH: Why DoorDash will work well in a post-pandemic world


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Many investors believed that companies like DoorDash (NYSE:HYPHEN) would not be well once the pandemic was over. However, DASH stock will reverse the long-term trend despite falling nearly 50% year-to-date.

The company’s latest earnings report is filled with stellar numbers. Customers are increasingly dependent on convenience and are showing a tendency to take advantage of home deliveries, which will not let up even as restaurants open. This is an important litmus test for DASH going forward. The company will probably have to adapt once more.

So far, DoorDash has worked pretty well. DASH stock price has risen and there is more momentum left in the company.

DASH stock will get you excited after the sharp correction

DoorDash posted revenue of $1.46 billion in its first quarter last year, up 35% from a year ago. Consumers appreciate the convenience of being able to order food online, anywhere. They can even request that a favorite meal be delivered to their home rather than having to travel.

Company data shows that transaction volume has increased year over year – in fact, the company has seen a 23% increase in the average number of customer orders. Since restaurants are now operating as normal, this is great news.

However, one of the things a business needs to ensure is that it can control costs. In its most recent earnings report, its operating loss fell from $110 million to $167 million. Indeed, DASH invests a lot of money to make its customers happy. Consumers like DoorDash because it’s the cheapest option. If the company raises prices to offset costs, the value of the transaction could drop sharply.

Although it doesn’t look very good now, many people are betting on the company to turn things around. There are many potential buyers and investors who want to buy more shares. It is important to understand that you should never make investment decisions solely on a single number. Therefore, although the operating loss is substantial, the business can more than cover it by cutting expenses and aggressively increasing revenue.

At the date of publication, Faizan Farooque did not hold (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publication guidelines.

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

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