Shares of DoorDash (DASH 1.41%), the food-delivery company that took America by storm (and conducted a blockbuster IPO) in 2020 and helped quarantining diners survive the pandemic, is having a great day Thursday: Its shares are up 9.5% in 1:50 p.m. EST trading.
There doesn't, however, appear to be any good reason for that.
Oh, not no reasons at all. There's the generalized optimism of a nation that just survived an apparent constitutional crisis on Wednesday and came out intact. There's also now the virtual certainty that we'll have a U.S. Senate and House unified under one-party rule, with that same party also in the White House, which promises to stimulate the U.S. economy in a big way this year -- perhaps up to and including by mailing out $2,000 stimulus checks to U.S. taxpayers.
And suffice it to say that $2,000 can buy a lot of takeout.
On top of all that, this morning, investment bank BTIG came out with a higher price target on Uber Technologies (UBER 1.32%) stock. Sure, Uber isn't DoorDash -- in fact, the two companies are bitter rivals -- but as TheFly.com just reported, in making its recommendation, BTIG raised its projections for 2022 to 2025 delivery bookings in general and pointed to investor enthusiasm for DoorDash stock as a reason to like Uber as well.
Should investors like DoorDash stock, though? (Should they even like Uber?)
Impressive revenue growth notwithstanding, neither company is actually earning any sort of a GAAP profit. That being said, in clear contrast to Uber, which burned through $4.4 billion in negative free cash flow over the last 12 months, S&P Global Market Intelligence data shows that in the same period, DoorDash generated $42 million in positive cash profits.
Sure, you can argue that $42 million isn't a lot of money for a company with the $48.6 billion market cap that DoorDash has. Indeed, it works out to a mind-numbingly high price-to-free cash flow ratio of 1,157! But at least it's a positive number. That's more than Uber can say...and it could be a good reason to prefer DoorDash stock over Uber.