What is DASH's Intrinsic value?

DoorDash Inc (DASH) Intrinsic Value Analysis

Executive Summary

As of May 22, 2025, DoorDash Inc's estimated intrinsic value ranges from $10.76 to $222.14 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $222.14 +8.5%
Discounted Cash Flow (5Y) $108.84 -46.8%
Dividend Discount Model (Multi-Stage) $70.10 -65.8%
Dividend Discount Model (Stable) $20.05 -90.2%
Earnings Power Value $10.76 -94.7%

Is DoorDash Inc (DASH) undervalued or overvalued?

With the current market price at $204.77, the stock appears to be significantly overvalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate DoorDash Inc's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  3. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.72 1.12
Cost of equity 7.2% 11.1%
Cost of debt 5.0% 5.0%
Tax rate 1.8% 3.7%
Debt/Equity ratio 1 1
After-tax WACC 6.0% 8.0%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 7.0% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $10,722 (FY12-2024) to $39,506 (FY12-2034)
  • Net profit margin expansion from 1% to 15%
  • Capital expenditures maintained at approximately 4% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $109 $41,618M 90.8%
10-Year Growth $222 $89,631M 83.4%
5-Year EBITDA $80 $29,573M 87.0%
10-Year EBITDA $145 $57,061M 73.9%

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 9.1%
  • Long-term growth rate: 4.0%
  • Fair value: $70.10 (-65.8% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 11.1% (Low) to 7.2% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $7 to $33
  • Selected fair value: $20.05 (-90.2% from current price)

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $4M
Discount Rate (WACC) 8.0% - 6.0%
Enterprise Value $51M - $67M
Net Debt $(4,500)M
Equity Value $4,551M - $4,567M
Outstanding Shares 424M
Fair Value $11 - $11
Selected Fair Value $10.76

Key Financial Metrics

Metric Value
Market Capitalization $86769M
Enterprise Value $82269M
Trailing P/E 255.96
Forward P/E 169.81
Trailing EV/EBITDA 13.40
Current Dividend Yield 62.96%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 1.04

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Discounted Cash Flow (10Y) 30% $66.64
Discounted Cash Flow (5Y) 25% $27.21
Dividend Discount Model (Multi-Stage) 20% $14.02
Dividend Discount Model (Stable) 15% $3.01
Earnings Power Value 10% $1.08
Weighted Average 100% $111.96

Investment Conclusion

Based on our comprehensive valuation analysis, DoorDash Inc's weighted average intrinsic value is $111.96, which is approximately 45.3% below the current market price of $204.77.

Key investment considerations:

  • Strong projected earnings growth (1% to 15% margin)
  • Consistent cash flow generation

Given these factors, we believe DoorDash Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.