Ray Dalio’s Top 10 Growth Stock Picks with 30+% Revenue Growth

3. DoorDash, Inc. (NASDAQ:DASH)

Number of Hedge Fund Investors  in Q1 2024: 76

1 Yr Revenue Growth: 33%

Bridgewater Associates’ Q1 2024 Stake: $81.8 million

DoorDash, Inc. (NASDAQ:DASH) is an American food delivery company that allows customers to order food from their homes or other remote locations. It enjoys a considerable market advantage in its primary industry, with data from Bloomberg Second Measure showing that DoorDash, Inc. (NASDAQ:DASH)’s market share of the food delivery market sitting at 67%. This means that as opposed to growing market share, the firm has to aggressively defend itself against well funded rivals such as Uber which holds a 23% market share. Additionally, the dominant market positioning also allows DoorDash, Inc. (NASDAQ:DASH) to grow revenue in tangential businesses such as grocery delivery. Both of its markets – food and grocery delivery – target working individuals who often do not have the time to either make their food or buy groceries. This means that DoorDash, Inc. (NASDAQ:DASH) is nearly assured a stable future market, but at the same time, the growth initiatives come at a cost. The firm is unprofitable, and analysts expect it to turn a profit in the current quarter. The ‘costs’ were clear as it revealed Q1 2024 earnings, with DoorDash, Inc. (NASDAQ:DASH)’s shares tumbling by 10% as Q2 operating income midpoint guidance of $375 million missing analyst estimates of $394 million.

Another key determinant of DoorDash, Inc. (NASDAQ:DASH)’s share performance is the macro environment. Here’s what management believes is in store for macro:

“I mean, in general, we’re not seeing, I think, the signs of strain on the consumer, but I think it perhaps has something to do with the segment that we operate in, which is digital and delivery. I do understand that there are some headwinds that certain merchants face when it comes to in-store traffic. But when it comes to all things digital, we’re actually not seeing, I think, those same signs of strains. Even, for example, in the US restaurants business, I mean, the growth is pretty consistent over the last six quarters. So it’s — that’s — whatever, 18 months or something that roughly has been true for. And so we tend to see that to be true there. We even see it true in other categories. Even categories like grocery, where you’re still seeing very sticky or very high inflation in terms of input prices which have led to high prices on grocery items.

But I think on the digital side, we tend to see pretty strong demand, and that’s why you see relatively stable growth.”