Hedgeye Adds DoorDash (DASH) as a Short Call

Hedgeye Risk Management added DoorDash as a new short call, citing slowing organic growth and worsening unit economics. The research firm said the company's heavy spending on new business lines is not producing the expected improvement in profitability.

DoorDash has moved beyond restaurant delivery into convenience and grocery. It is also pushing into international markets in Europe, Australia, and Japan. Those moves require upfront investment. Hedgeye's argument, according to the note, is that the revenue from these new categories is not translating into better unit economics fast enough to justify the spending.

The stock already carries a Weak AlphaScala Score of 34/100. That score puts it in the bottom tier of our consumer cyclical coverage. Most peers in the sector show stronger profitability trends and more consistent growth. The AlphaScala framework scores DASH low on earnings quality and revenue growth consistency, the same areas Hedgeye highlighted.

Hedgeye's short call adds a fresh layer of bearish sentiment. The stock has traded in a range since its initial public offering, with investors looking for signs of sustainable margin expansion. Hedgeye's analysis suggests that progress will remain slow as the company prioritizes scale over profitability.

The short call does not pin the thesis on a single near-term event. The firm laid out structural concerns that it expects will take time to play out. The next quarterly report, due within weeks, will give the market the first concrete data since the call. For traders, the addition to Hedgeye's short list is a signal that a well-known research shop sees downside risk beyond what the current price reflects.

DoorDash's core restaurant delivery business faces growing competition from Uber Eats and local rivals. That competition may pressure take rates and order growth. Meanwhile, the company's expansion into non-food categories like convenience and grocery has yet to show the same adoption rates as its core business, which increases the risk that investment returns fall short of expectations.

The heavy spending extends beyond marketing to operational costs. DoorDash must subsidize both consumers and drivers to build density in new markets. Those costs are variable but remain elevated until a market reaches scale. Hedgeye's unit economics concern likely reflects that the per-order cost has not declined as quickly as anticipated, even as order counts rose.

Hedgeye has a track record of identifying structural short ideas in the consumer sector. Its calls are often tied to multi-quarter themes, not short-term noise. Adding DoorDash suggests the firm believes the company's current strategy will fail to generate adequate returns on capital. The stock's enterprise value-to-revenue multiple already exceeds that of Uber Eats and Just Eat Takeaway, leaving less margin for error if growth slows further.