[I own DoorDash stocks and I may change my opinion anytime. This is not investment advice and please do your own due diligence.]

DoorDash published its 2025 Q1 results earlier this month. Similar to the prior few quarters, DoorDash’s GOV exceeded almost all sell-side estimates and its AEBITDA landed within the range of its own guidance. The business continues to enjoy strong momentum, as reflected in its retention, order frequency, and market share. Thanks to the fundamentally human nature of “we have to eat” and “we like convenience,” DoorDash’s business so far has not been impacted by the ever-shifting macro environment.

In August 2024, I wrote the following: “… what’s next for DoorDash? If I have to guess, it would probably be the inclusion of DoorDash into the S&P 500 Index” (link). On March 7, S&P Dow Jones Indices announced that DoorDash was going to join the S&P 500. I am glad to see my prediction transpire.

Good Signals

There are a lot of positives to like about DoorDash. Here are two of my recent observations. One is about affordability. The other is about long-term financial guidance.

Affordability

DoorDash appears to be the only business in its field that truly believes in consumer “affordability.” Why affordability? Affordability matters because it has a direct relationship to how big your market can grow, which then translates back into how big your business can grow.

Versus its near peers, DoorDash is the first company that puts a big emphasis on affordability:

• In February 2021, at its very first earnings release as a public company, DoorDash management had already started talking about “affordability” and “keep prices low”—as seen in that month’s investor letter and the ensuing earnings call.
• For Uber, the first time its management seriously talked about “affordability” was not until two and a half years later, in August 2023, when “affordability” was mentioned in its prepared remarks to investors.
• For Instacart, in its IPO Prospectus (dated September 2023), “affordability” was mentioned in the limited context of selected groups of products and consumers.
• For Lyft, the first time “affordability” was mentioned once was back in August 2022 and the first time “affordability” was mentioned more than once was May 2025 (this month!) at its 2025 Q1 earnings call.

Not only is DoorDash the first to “talk the talk” but also DoorDash appears to be more true than others in “walking the walk.” Consider the following:

• In 2025 Q1, DoorDash “reduce[d] average consumer fees structurally for grocery consumers within DashPass” (source: DoorDash conference call, May 13, 2025).
• On May 1, 2025, Uber emailed Uber One members that effective June 1, 2025, Uber One members “may see additional fees across Uber Eats on certain orders…” Context: On May 7, 2025, Uber management said on its earnings call, and I quote, “In terms of Delivery, we are very focused on affordability as it relates to Delivery as well.” Umm…
• Back in 2024, Instacart emailed Instacart+ members that effective November 19, 2024, Instacart+ members will no longer enjoy “5% credit back on pickup orders” and effective March 1, 2025, Instacart+ members will no longer enjoy “reduced service fees.” Context: On May 1, 2025, Instacart’s management said on its earnings call and I quote, “…we continue to lean into affordability, no doubt about that.” Reeeally?

Long-Term Financial Guidance

Publicly traded companies appear to have some kind of primal desire in giving long-term financial guidance. Some examples:

• Uber has issued long-term guidance multiple times. For example, at its IPO back in 2019, it gave a set of long-term guidance for both top and bottom lines. Then, in February 2022, Uber hosted an “Investor Day” and issued a new set of long-term guidance. Again, in February 2024, Uber hosted an “Investor Update” event and issued a “Three-Year Outlook” framework.
• In late 2023, Instacart issued a set of “long-term targets,” covering revenue, cost, and profitability items, in great detail.
• In June 2024, Lyft joined the pack by hosting an “Investor Day” and presented to investors its “2027 Targets,” showering investors with quantitative numbers and qualitative comments.

DoorDash is the only one in this group that does not issue long-term financial guidance. Actually, as a public company, DoorDash has never hosted an Investor Day nor offered any commentary on its long-term financial metrics.

If anything, DoorDash went to the polar opposite by “shortening” the time frame of its own guidance. In 2024 Q1, DoorDash stopped issuing annual guidance. On May 13, 2025, possibly annoyed by a question coming from a financial analyst, DoorDash CFO Ravi Inukonda said and I quote, “I often find it weird when peers or other companies come out and say, hey, here’s the long-term target for, you know, ads as a percent of GOV. The merchant is not thinking of it that way…”

So far, DoorDash has been able to set itself apart by inhibiting the instinctual desires to “flirt” with capital markets via gorgeous and seductive “long-term financial guidance” metrics. Acute observers would immediately see through it and understand that for both parties in this dynamic, short-term pleasure comes with long-term costs.

For companies, tying yourself to a set of long-term targets limits your growth (when it comes to growing your market) and limits your choices (when it comes to responding to competitor moves). It is also possible that, for company management, when issuing long-term guidance, either you know you don’t know (and you still did it) or you don’t know you don’t know—neither is good! As to the other party in this dynamic—the investors, you get what you paid for: some short term pleasure in the stock price, and no more and no less.

Walking the walk on affordability. Running a business as realistic operators. In addition to what I wrote so far on this personal blog about DoorDash, those are the reasons why I continue to think highly of DoorDash.

Concerning Signals

At the same time, there are things I feel concerned about. For DoorDash the stock, as I have laid out in my immediate prior piece (link), the stock is not cheap. Investors should be mindful about the stock’s valuation and potential drawdowns.

For DoorDash the business, versus a few months ago, it has suddenly become “high octane.”

On May 3, DoorDash agreed to acquire SevenRooms (a private company) for $1.2B in cash. On May 6, DoorDash agreed to acquire Deliveroo (a public company listed in London) for an equity value of £2.9B, again, all cash. A few days later, on May 28, DoorDash sold $2.5B of convertible senior notes—marking it the first time in five years DoorDash has carried debt. So, net net, prior to these two acquisitions, as of 2025 Q1, DoorDash had $6.7B in cash and no debt. Post the two deals, DoorDash would have $5B (rough math!) in cash and $2.5B in debt. (All numbers in this paragraph are “approximate.”)

To put these numbers in context, for fiscal year 2025, my estimate is that DoorDash could possibly generate some $2.5B in free cash flow, which is roughly equivalent to the size of this new debt. On a different note, the terms of the convertible notes appear to be highly advantageous to DoorDash the issuer (which is a separate topic).

In addition to the new debt burden, from a business perspective, the surface area that DoorDash operates on is rapidly expanding. Geographically, DoorDash will soon operate (via Deliveroo) in places such as the UK, France, UAE, and Singapore. All are completely new markets for DoorDash and all have incumbent players. Vertically, through SevenRooms, DoorDash will be competing against OpenTable (owned by Booking.com), Resy (owned by American Express), Toast (another listed company) and others—many of those are established companies with abundant resources to push back on DoorDash.

A widening business war!

Widening Range of Outcomes

Considering all of the above, my assessment at the moment is that for investors, DoorDash is a stock with a widening range of outcomes. Downsides are getting bigger. Upsides are getting bigger as well!

Post the two acquisitions, DoorDash’s management team is going to be ever more stretched. They must fight against ever more numerous competitors, across a front line that stretches ever wider. DoorDash’s operating environments are quickly becoming more complex and less predictable. Combined with a “not cheap” valuation, it is not unreasonable to imagine that DoorDash’s stock price may see occasional, if not prolonged, drawdowns.

Meanwhile, there are also a lot of upsides to look forward to in DoorDash. Many of these good outcomes appear to be within reach—yet, they could also prove to be illusional. A high level of execution is a must. And only time will tell. Let me throw some examples here, not meant to be in any particular order:

• In London, DoorDash might become the market share leader. Deliveroo has a historically strong position in London. SevenRooms has an extraordinarily large presence in London as well. Combining Deliveroo and SevenRooms under one owner, plus the additional resources from DoorDash the “mother ship,” can possibly lead to an outcome that DoorDash will win big in London—a “trophy” market to own. Similar hypotheses can be applied to Paris, Dubai, Singapore—and if we stretch it a bit more—across Australia as well, with London being the most likely one as far as I can see now.
• The acquisition of SevenRooms creates room for imagination. For example, DoorDash might build a new restaurant marketplace that has no per-cover fee and that restaurants can advertise in new and creative formats—which would then produce a high-margin revenue stream for DoorDash, helping fix DoorDash’s inherent “problem” of its own existence as a low-margin food delivery business.
• For another example, DoorDash might expand SevenRooms products to serve merchants beyond only restaurants and hotels, to include merchants like barbershops, dental clinics, etc. And that would naturally fulfill DoorDash’s goal of making DashPass “your membership program to the physical world” (source: DoorDash 2025 Q1 earnings call). Careful readers of DoorDash’s 2025 Q1 press release would notice that when describing SevenRooms, DoorDash management avoided the word “restaurants” and instead used the word “merchants.” Also, in the same text, DoorDash management wrote “we are extremely excited”—a rare phrase, and probably the first time DoorDash management ever used this phrase to express their optimism on a new project.

That is why I see a widening range of outcomes for DoorDash.

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Disclaimer: Jackson Zhu (the “Author”), individually or through one or more entities controlled by him, holds long positions in the securities of and derivatives associated with DOORDASH, INC. (the “Company”) described herein and stands to benefit from an increase in the price of the common stock of the Company. Following the publication of this post, the Author intends to continue transacting in the Company’s securities, and may become long, short, or neutral on the Company’s securities. As such, the Author may change his view on the analysis presented as of any date following the date of initial publication. Likewise, the discussion contained here is not designed to be applicable to the specific circumstances of any particular reader, and you should consult with your own advisers to determine if any investment ideas discussed here are appropriate for your circumstances. The Author has obtained all information herein from sources believed to be accurate and reliable. However, such information is presented “as is,” without warranty of any kind, whether express or implied. The Author makes no representation, express or implied, as to the accuracy, timeliness, or completeness of any such information or with regard to the results to be obtained from its use. All expressions of opinion are subject to change without notice, and the Author will not undertake to update this publication or any information contained herein. Please read our full disclaimer at “jacksonzhu.com/about/.”