Boosted by explosive earnings growth, DoorDash (DASH) has staked out a spot on this month’s list of new buys by the best mutual funds. The company plans to expand its partnership with Coco Robotics, a robotic food deliverer.
DoorDash stock has popped onto the IBD Leaderboard watchlist as it looks to serve up a double-bottom breakout in a volatile market. And while President Donald Trump’s tariffs continue to stir uncertainty on Wall Street, DoorDash’s new chart pattern comes with a potentially promising twist.
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DoorDash Goes ‘Coco’ For Robots
Headquartered in San Francisco, DoorDash’s technology platform connects consumers with local businesses in more than 30 countries around the world. Founded in 2013, DoorDash had its initial public offering in December 2020 as the coronavirus pandemic disrupted the global economy, with restaurants particularly hard hit.
DoorDash has since expanded beyond its roots in food delivery. The company has inked deals with home-improvement retailer Lowe’s (LOW) and Pet Supplies Plus.
Last week, DoorDash announced the expansion of its partnership with Coco Robotics. Building on an existing pilot program in Helsinki, the U.S. rollout is now live in Los Angeles and Chicago. Eligible customers can see the availability of Coco’s fleet of emissions-free sidewalk robots and may have one assigned to their order via the DoorDash app.
Robot delivery is part of the Dasher network, the company’s global multimodal delivery platform, which includes the use of drones and more to meet increasing demand while lowering costs and emissions.
In other partnership news, DoorDash announced in October that its annual membership program will include discounts on Lyft (LYFT) rides.
Delivering Profits
Over the last eight quarters, DoorDash has delivered sales growth ranging from 23% to 40%. In the fourth quarter, the company posted more than $2.87 billion in revenue, marking a 25% year-over-year gain. Analysts expect DoorDash to eclipse $3 billion in sales when it unveils first-quarter numbers on May 7.
DoorDash posted third-quarter earnings of 38 cents a share, smashing Wall Street’s estimate of 22 cents. On Feb. 12, the company reported fourth-quarter earnings of 33 cents per share, compared with a prior-year loss of 39 cents. Estimates called for earnings per share of 34 cents.
While still coming off a prior-year loss, analysts expect DoorDash to deliver triple-digit earnings growth in each of the next two quarters.
For the full year, Wall Street forecasts 660% earnings growth to $2.21 per share.
DoorDash Stock Flashes This Positive Sign
Given the extreme volatility in the current market, it’s not surprising that many stocks have formed double-bottom bases, a common pattern in such environments. DoorDash stock is no exception.
While it’s risky to make new purchases amid such market turmoil, the potential entry for DoorDash’s new setup is 201.03. On the downside, the stock remains below its 50-day moving average after running into resistance multiple times at that buy point this month. The 21-day exponential moving average also has slid below the longer-term 50-day line, a sign of weakening technical performance. See if the 21-day line can begin heading north and climb back above the 50-day benchmark.
As DoorDash navigates this tricky market, it has recently reset its base count, making the new double bottom a first-stage base. Early-stage bases have a higher likelihood of success than patterns in their third stage or later.
DoorDash’s relative strength line is another positive. While it has slipped as the new base forms, the RS line remains within striking distance of a 52-week high.
So as Wall Street wobbles with worry and uncertainty regarding President Trump’s tariff policies, investors might check to see if DoorDash can weather the storm. Boosted by demand among top funds and a positive growth outlook, see if the stock can launch a fresh climb when a new market uptrend takes hold.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
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