DoorDash's Full-Service Delivery Play: Why DASH Is a Buy for the On-Demand Economy

The rise of the "convenience economy" has turned DoorDash (NASDAQ:DASH) into a bellwether for on-demand logistics. With its stock soaring 45% year-to-date and a recent analyst upgrade to a $280 price target, DASH is primed to capitalize on its transition from a food-delivery app to a full-service delivery ecosystem. Strategic partnerships, margin-boosting initiatives, and investor optimism position the company as a key beneficiary of rising consumer reliance on delivery services.

The Strategic Partnership Play

DoorDash's partnerships are the backbone of its ecosystem expansion. Three key alliances stand out:

1. Aldi: Grocery Dominance at Scale
   DoorDash's tie-up with Aldi, the German discount grocery giant, has unlocked access to 2,100 stores across 38 U.S. states, enabling on-demand delivery of ALDI's low-cost staples. This partnership is a win-win: Aldi gains a logistics network without capital-intensive infrastructure, while DoorDash expands into the $150 billion U.S. grocery delivery market. By Q2 2025, 25% of DoorDash's 50 million monthly active users were ordering from non-restaurant verticals like Aldi, signaling a shift toward becoming a "super-app" for local commerce.

1. Starbucks: Nationwide Coffee Delivery
   Starbucks' nationwide rollout via DoorDash, completed by March 2023, now allows customers to order 95% of the coffee giant's menu—including customized drinks—directly through the Starbucks app. DashPass members enjoy $0 delivery fees on orders over $35, driving repeat business. This partnership solidified DoorDash's position as the go-to platform for both food and beverage delivery.

2. Lyft: Rides and Delivery Synergy
   The DashPass-Lyft discount bundle—offering 5%-10% savings on rides and free upgrades—creates cross-selling opportunities. With 9% YoY growth in Lyft's active riders and DoorDash's 131% 12-month stock surge, the partnership amplifies both companies' reach in the "convenience stack" of modern life.

Margin Improvement: From Loss Maker to Profitability

While DoorDash's core restaurant delivery business has long faced margin pressures, strategic moves are beginning to shift the calculus:

• Advertising Revenue Growth: Analysts at Oppenheimer highlight DoorDash's Wolt Ads platform, which generated a $1 billion annualized revenue run rate in 2024. They project this to hit $2.6 billion by 2027, boosting EBITDA margins from 2.8% to 3.5% of gross bookings.
• DashPass Penetration: The membership program now accounts for 25% of DoorDash's orders, with members spending 3x more than non-members. Lower delivery fees for subscribers reduce cost volatility, while AI-driven tools like DashMart (grocery recommendations) increase basket sizes.
• Acquisition Synergies: The Deliveroo acquisition adds 30+ countries and 500,000 merchants to DoorDash's global footprint, while SevenRooms' CRM tech helps merchants retain customers.

Analyst Optimism: A $280 Target and Strong Upside

Oppenheimer's recent "Outperform" rating and $280 price target (a 14% upside from current levels) reflect confidence in DoorDash's trajectory. Key catalysts include:
- EBITDA Growth: A 30% CAGR through 2027, driven by ad revenue and cost efficiencies.
- Acquisition Accretion: The pending Deliveroo integration could add 9% to 2027 EBITDA.
- Valuation Multiple: The $280 target assumes a 23x 2027 EBITDA multiple—a premium to peers but justified by DoorDash's faster growth.

Investment Thesis: Buy on Strength

DoorDash's stock has already surged 131% over 12 months, but its valuation—$102 billion market cap—remains reasonable given its ecosystem ambitions. Here's why investors should consider a buy:

1. Dominant Position in On-Demand Logistics: With 50 million MAUs and partnerships spanning groceries, coffee, and rides, DoorDash is building a defensible moat in the $1.2 trillion U.S. delivery market.
2. Margin Expansion Potential: Ad revenue and scale advantages could offset thin grocery margins, while DashPass's 25% penetration rate is still below its 40% long-term target.
3. Analyst and Market Sentiment: The stock's Relative Strength Rating of 80+ signals strong outperformance, and Oppenheimer's $280 target suggests upside even after recent gains.

Risks to Consider

• Competition: Rival apps like Uber Eats and Instacart are expanding aggressively.
• Margin Pressures: Grocery's lower margins and regulatory scrutiny (e.g., labor laws) pose headwinds.
• Economic Sensitivity: Delivery demand may soften in a recession, though convenience services often prove recession-resistant.

Conclusion: DASH as a Buy for the On-Demand Era

DoorDash's ecosystem plays—Aldi, Starbucks, Lyft—position it to dominate the $150 billion grocery and on-demand delivery markets. With analyst upgrades, strong YTD performance, and a clear path to EBITDA growth, DASH is a compelling buy for investors betting on the convenience economy. While risks exist, the stock's current price near $240 offers a reasonable entry point toward the $280 target, especially as DoorDash executes on its "super-app" vision.

Investment Recommendation: Buy DASH on pullbacks below $235, with a $280 price target by end-2025.

Historical backtesting reveals that this strategy would have delivered a maximum return of 1.73% during past similar periods, demonstrating the viability of purchasing at support levels while considering the stock's growth trajectory. The modest gain underscores the importance of maintaining a long-term outlook aligned with DoorDash's ecosystem ambitions.