DASH fundamentals (revenue growth, ROIC) are strong but valuation is only at fair value; no buy upgrade yet.

DoorDash, in particular, is expanding its self-delivery robot , which it calls the DoorDash Dot, at a remarkable pace in Phoenix. There are tens of thousands of customers who are now receiving their orders via this self-driving robot.

Now, does this technology and everything that is combined with " Dur Dash" make the company's stock a good buying opportunity? I want to take a look at the company's long-term performance and compare it to its valuation, taking into account the future benefit of robot connectivity to make this decision in this video.

As you can see here, DoorDash's total revenue over the past twelve months was around 2.5 billion in 2021, and has jumped hugely to 16 billion over the last twelve-month period.

Even if we exclude recent acquisitions and their positive impact on overall revenue , "Dash Door" and other food delivery networks in the sector as a whole have continued to grow.

You might think that these fees are too high and that this business cannot make significant profits if it has to charge 50% fees. But when viewed from a different perspective, it seems more logical.

In this context, it seems perfectly logical. It's a great and excellent value that the client offers, and you can see that through the growth of these networks. DoorDash leveraged its larger scale to improve unit economics, and its operating profit margin improved to 5.5%.

One of the benefits of this business model at Dor Dash is that it does not own any of the vehicles used by the drivers for deliveries. The drivers are the ones who bring these vehicles to the network, and Dash Dor benefits from those assets that the drivers provide.

This is a profitable business model for DoorDash.

The difficult part for Dash is convincing traders to join the platform. It is understandable that merchants are hesitant to join the DoorDash platform because they are giving up some control over their relationships with customers in exchange for joining and accessing a larger customer base.

This asset-light model I mentioned in the previous section boosted the company's return on invested capital to 6.4% after it was negative at 20% in 2023.

Since it does not need to reinvest much in the platform, I believe the company has great potential to achieve a high return on invested capital. One of the areas in which the company invests is the unification of the technological infrastructure globally, given its acquisition of some similar companies in international markets.

In addition, as mentioned, it is investing in self-driving robot delivery, which may be an intensive capital endeavor . But they are doing so in measured steps, and will only expand if they see it as a positive and profitable development in the specific cities where they offer this service.

The rating is also attractive. Dordash shares are trading at a forward price-to-earnings ratio of 23.8, which I think is an attractive valuation for a company with these characteristics and this much upside potential.

Now, when I evaluate the company using my discounted cash flow model, I don't see an undervalued stock , but rather a stock valued at its fair value. I calculated a fair value of 185 compared to the current market price of 183, which is only a 4% difference, and this is within my margin of safety .

I last evaluated this business on August 7, and it did not appear to me to be a buying opportunity.

During the past month, DoorDash stock has fallen by more than 13% . Therefore, the risk- reward ratio has improved since the last time I evaluated the company, but not enough to justify upgrading the recommendation.

It's getting close to that. It is making great progress, but I would like to see more performance improvement or more market price decline before I upgrade DoorDash stock to a buy recommendation.