Are These The Best Food Delivery Stocks To Buy This Week?
If you told me that food delivery stocks would be the top performers on the stock market over a year ago, I would not have believed you. However, with the current pandemic came significant demand for food delivery services. No doubt, this would be the case after factoring in limited dine-in experiences and greater restaurant adoption rates. As a result, top food delivery stocks have and continue to be in the spotlight right now. Sure, this is all great news now. But, the real question is whether or not the industry can maintain its current momentum moving forward.
Well, according to data from Morgan Stanley (NYSE: MS) and global management consulting firm McKinsey, the answer could be a yes. In short, the data shows steady growth in U.S. food delivery app revenue over the past few years. For a sense of scale, this figure has skyrocketed from $10 billion in 2016 to $26 billion in 2020.
Furthermore, more consumers than ever are currently experiencing the convenience of food delivery and the related tech behind it. All this could serve to boost the food delivery industry moving forward. Even conventional grocers such as Target (NYSE: TGT) and Walmart (NYSE: WMT) are now part of this trend via grocery delivery services. Would it be wise for investors to bet on the food delivery industry now? If you are leaning towards a yes, here are four to consider.
Top Food Delivery Stocks To Watch
- Altimeter Growth Corporation (NASDAQ: AGC)
- DoorDash Inc. (NYSE: DASH)
- GrubHub Inc. (NYSE: GRUB)
- Uber Technologies Inc. (NYSE: UBER)
Altimeter Growth Corporation
Special purpose acquisition company (SPAC) Altimeter announced today that it is set to merge with Grab, a multinational ride-hailing company that is headquartered in Singapore. Furthermore, the merger looks set to be the largest-ever U.S. equity offering by a Southeast Asian company. The combined companies expect their securities to be traded on NASDAQ under the symbol GRAB in the coming months. AGC stock currently trades at $14.22 as of 12:33 p.m. ET.
The merger would put an expected equity value of approximately $40 billion. Grab is a super app that is dedicated to serving everyday needs of consumers. Its three main businesses are food delivery, ride-hailing, and digital wallet payments in the Southeast Asia region. The public listing could further reinforce Grab’s strong business momentum that includes a gross merchandise value of approximately $12.5 billion in 2020.
Furthermore, this value had already surpassed pre-pandemic levels. Southeast Asia is also one of the fastest-growing digital economies in the world, with a population of approximately twice the size of the U.S. Across Grab’s three business segments, it expects its total addressable market to grow up to $180 billion by 2025. Given all of this, will you consider buying AGC stock?
DoorDash is an online food ordering and food delivery platform that is based in San Francisco. Also, it is one of the largest food delivery companies in the U.S. whose platform serves over 450,000 merchants and 20 million customers.
In essence, its platform enables local brick-and-mortar businesses to thrive in today’s economy by addressing consumers’ expectations and ease and immediacy. DASH stock currently trades at $147.28 as of 12:33 p.m. ET. In February, the company announced its fourth-quarter and full-year 2020 financial results.
In it, the company reported that it had a revenue increase of 226% year-over-year to $970 million. DoorDash’s total orders grew by 233% year-over-year to 273 million. In the quarter, the company noted that it had strong growth for both its Marketplace and Drive business segments. Partner stores for both Marketplace and Drive grew by 87% and 158% respectively year-over-year. DoorDash has provided merchants with the necessary services to operate a digital business and increase sales through their own channels. With that in mind, will you consider DASH stock as a top food delivery stock to buy?
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Grubhub is an online and mobile prepared food ordering and delivery platform. In brief, the company features over 300,000 restaurants in over 4,000 U.S. cities. The company’s portfolio of brands includes Grubhub, Seamless, LevelUp, AllMenus, and MenuPages. GRUB stock currently trades at $71.40 as of 12:33 p.m. ET and has been up by 6.74% on today’s opening bell. Basically, investors could be responding to news from Just Eat Takeaway.com’s business update today. The company reported strong growth and also expects to complete its acquisition of Grubhub in the first half of 2021.
In February, Grubhub reported a 48% revenue growth for the quarter at $504 million. Its Gross Food Sales grew by 52% year-over-year to $2.4 billion. The company also noted that its active diners grew by 39% to 31.4 million and daily average grubs increased by 31% to 658,100.
Grubhub founder and CEO Matt Maloney had this to say, “We remain steadfast in our support of our restaurant partners as the ongoing pandemic continues to weigh on their businesses and their local communities. From increased marketing spend and reduced commissions, to winterization grants and free digital ordering tools, we continue to be fully committed to assisting our restaurant partners.” With that in mind, will you consider adding GRUB stock to your portfolio?
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Uber Technologies Inc.
Topping off our list is Uber Technologies Inc. If anything, the company’s food delivery services are increasingly becoming a key component of its portfolio. Notably, the company has and continues to expand its UberEats division significantly. Evidently, it acquired Postmates last year while also penetrating the prescription and alcoholic beverage delivery markets. Given all of this, I can understand if investors are bullish on UBER stock now. In fact, the company’s shares are currently looking at gains of over 100% in the past year. Given Uber’s latest announcement this week, investors could be watching it closely.
In detail, Uber posted record monthly bookings in March. Particularly, the company’s mobility division had its best month since March 2020, boasting an annualized run rate of $30 billion. Meanwhile, UberEats achieved a record annual run rate of $52 billion in March, more than double compared to March 2020.
While the company appears to be firing on all cylinders, analyst sentiment on UBER stock appears positive as well. Just last month, Wedbush Securities analyst Daniel Ives said that the company is “well-positioned to see a springboard of consumer demand bounce back” moving forward. Should this be the case, would you consider UBER stock a buy now?