DoorDash’s Q4 Results Displayed Strong Network Effect, Solid 2023 Guidance; Shares Undervalued

We were pleased with DoorDash’s fourth-quarter results as the firm’s network effect moat source remained on display, with growth in users and monetization. Order frequency was stable when compared with 2021 even after the addition of Wolt. While DoorDash’s offerings are not as diversified as Uber’s, the quarterly results demonstrated the firm’s ability to attract subscribers and cross-sell other delivery services, which further strengthened the platform’s network effect and could lower consumer acquisition costs and expand margins. DoorDash expects strong growth in the first quarter and full-year 2023, which not only includes contribution from the purchase of Wolt but also solid organic growth. The firm also announced a $750 million share repurchase program. We are maintaining our $155 fair value estimate, which represents attractive upside.