What Are The Best Food Delivery Stocks Now? 1 Just Went Public
Food delivery stocks have understandably had a good year on the stock market so far. With the coronavirus pandemic either halting or limiting dine-in experiences, many find themselves turning to these services. Months ago, when the pandemic was in its early stages, many people attempted to cook their meals at home. As you and I both know, the entire process of cooking and washing up after can be a tedious one. Admittedly, this trend fueled by the fresh mindset of wanting to keep busy during the COVID-19 pandemic has not aged well. When given the option, people will always choose convenience.
We can see this clearly by looking at the share prices of the top food delivery stocks. Papa John’s (PZZA Stock Report) and GrubHub (GRUB Stock Report) shares have recovered by over 130% since the stock market crash in March. Despite the great performance by the industry this year, investors may be concerned about its long-term viability. To address the elephant in the room, the coronavirus pandemic will not be around forever, hopefully. After that, we could of course see a reversion to the pre-pandemic growth rate in the food delivery industry.
As the pandemic drags on and more restaurants continue to rely on food delivery companies, the industry seems poised to prosper in the meantime. Investors could be looking for an entry point before the opportunity passes them by. Considering all that, here is a list of top food delivery stocks to watch this month.
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Top Food Delivery Stocks To Watch This Month: Uber Technologies Inc
First up, we have Uber (UBER Stock Report). Uber, for the uninitiated, is mainly a transport company that offers a variety of ride-sharing services. For this article, we will be focusing on its food delivery subsidiary UberEats. UberEats serves as an online food ordering and delivery platform and has been around since 2014. The company’s share prices are seeing gains of over 50% in the past six months. Pandemic tailwinds aside, let us take a look at what else could be adding to this.
In its recent quarter fiscal released in November, the company actually reported a 17% year-over-year drop in total revenue. Losses from its ride-hailing segments were at about 50% year-over-year. On the bright side, its delivery segments saw a 135% increase in bookings compared to a year earlier. This translated into a 125% rise in delivery revenue in the same period. Due to its unique business model, the company appears to be making the best of its situation now. CEO Dara Khosrowshahi cites “an increasing pace of innovation” as the root of this success. Notably, the company extended its delivery offerings into groceries and prescriptions while bolstering its subscription plans.
In recent news, Uber has just expanded its Uber Connect delivery service. Uber Connect is a delivery service that allows users to send essential supplies and items to friends and family. As of this week, the services have been extended to 2,400 cities across the U.S. This is just in time for the holiday seasons where people will be looking for a way to celebrate responsibly from their homes. Undeniably, it is a good play by Uber who does not seem to be sitting idle. The question is, will all this be enough to make UBER stock blossom in 2021? I’ll let you decide.
Top Food Delivery Stocks To Watch This Month: LYFT Inc
Following that, we have Lyft (LYFT Stock Report). Lyft is another well-known name in the ride-hailing business. Before the pandemic hit, it held about 30% of the U.S. ride-hailing market share second to our earlier entry Uber. Similar to its peers, the company has branched into food delivery services as well. It currently has a partnership with GrubHub restaurants providing free delivery for its Lyft loyalty members.
The company’s share prices are impressively up by over 195% since the lows in March. Upon closer inspection, the company appears to be headed in the right direction. In its recent quarter fiscal posted in November, the company reported a 47% rise in revenue quarter-over-quarter. On top of that, it ended the quarter with $2.5 billion in unrestricted cash and short-term investments. Despite reporting a decrease in revenue, investors still appear to be rallying behind Lyft. A reason for this could be the company’s involvement in an $810 million contract with the government. The five-year contract will see Lyft providing transportation for millions of federal employees. Obviously, this brings some certainty to the long-term viability of the company.
In recent news, Lyft does not seem to be slowing down as it has just partnered with Denver’s Regional Transportation District (RTD). In this deal, Lyft’s transportation services will be seamlessly integrated with RTD stations through a mobile ticketing platform. Given that 58% of its customers in the area report using Lyft services to get to RTD stations, this is a great move by the company. Essentially, customers will be able to plan and pay for their entire trip through the app. This will definitely serve to incentivize greater use of Lyft. All things considered, do you think LYFT stock is worth watching now?
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Top Food Delivery Stocks To Watch This Month: DoorDash Inc
Next, we will be talking about the freshest food delivery stock on the market, DoorDash (DASH Stock Report). DoorDash is the largest food delivery service in the U.S. as of January this year, it holds a massive 50% of the market share. The company has indeed come a long way since its conception in 2012.
Astoundingly, it has raised $3.4 billion since it began trading on Wednesday afternoon. The 33 million shares offered at $102 a piece are currently trading at a comfortable $180 as of 10:00 a.m. ET. This adds up to a staggering 76% increase. Considering it is the leading food delivery service in the U.S., the current hype from investors is not unwarranted.
If we go over the company’s S-1 filing, the reaction from investors becomes pretty justifiable. As a matter of fact, the company tripled its revenue to $885 million in 2019. Moreover, DoorDash raked in more than double of that figure in just the first nine months of 2020. In a market that has been very rewarding to food delivery stocks, investors are very hungry for DASH stock. How about you?