While it might seem counterintuitive to ponder if food delivery service DoorDash Inc. (NYSE: DASH) can make a turnaround just slightly more than a month after its Dec. 9, 2020, IPO, the company’s extremely high stock valuation when it went public raises the question of whether it will rise or sink from here.
On the surface, a nearly $200 share price looks overvalued, since the company operates in the crowded, unprofitable food delivery sector. But those interested in consumer discretionary stocks might want to consider other factors that suggest DoorDash could see strong 2021 gains if it plays its cards right.
DoorDash threw down the gauntlet to the market boldly when it made its IPO at $102 a share on Dec. 9 rather than the lower prices which were initially proposed. The stock’s value almost immediately witnessed runaway growth, opening at $182 and rising to more than $189 per share before slumping over the course of December. The price dropped to a low of approximately $140 in early January before starting another volatile rise to roughly the $190 level.