Yet Another Value Podcast - Pershing Square Challenge 2026 winners on DoorDash $DASH

Episode Date: May 22, 2026

The winners of the Pershing Square Challenge 2026 discuss their Doordash pitch, including why the growth story still has room to run (and the 90 primary research calls they made to back up that call). We get into durable US restaurant growth, why new verticals and international could inflect to profitability earlier than the street models, the underappreciated opex leverage, their proprietary Wolt case study, the Tony Xu bet, and why they think the Citrini AI-agent thesis on DoorDash is overblown.This episode is sponsored by Trata. Check out their DASH transcript at https://www.trata.com/dashTeam DASH presentation: ZK's LinkedInAaron's LinkedInElliot's LinkedInChapters00:00 The Pershing Square Challenge and team DoorDash01:14 Sponsor: Trata02:50 Meet the team: ZK, Elliot, and Aaron05:40 Why they picked DoorDash out of the screen10:10 The bull case in three parts11:20 US restaurant growth: still the middle innings?13:20 Demographics as a tailwind17:50 Order frequency and the China comp21:00 Valuation: $70B cap, adjusted EBITDA, and the path to $32025:35 The real downside: competition, Amazon, bundled memberships29:50 The ~90 primary research calls33:35 New verticals and the grocery economics38:10 A DoorDash bet or a Tony Xu bet?41:40 Management comp and alignment43:45 International: the Wolt case study and Deliveroo47:00 The tech-stack reinvestment cycle51:00 Sylvie makes her podcast debut51:20 Citrini and the AI-agent threat56:20 WrapLinks:Yet Another Value Blog - https://www.yetanothervalueblog.comSee our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimerProduction and editing by The Podcast Consultant - https://thepodcastconsultant.com/

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You're about to listen to the yet another value podcast with your host, me, Andrew Walker. Today we have the first, you know, the Pershing Square Challenge happens every year. It's Columbia Business Students, the Columbia Business School, they get together, they all pitch a stock. And at the end, there is a winning team. And today we have the winning team on, the team DoorDash. I'll let them introduce themselves. Or I'll all just note, you know, these are rising between first and second year business school students. If you want to reach out to them, they did unbelievable work.

You're going to hear it in the podcast. but they talked to 90, 90 different primary research people. I told them they should have founded it so 100, but they talked some 90 people. Particularly, I wish I'd hit it harder. The international work, I had multiple people reach out and be like, this was a proprietary research thing that they did to prove the value of some international acquisitions they did,

that people were just blown away by. So they did awesome work. It's a great podcast. You're going to hear it on DoorDash. They did great work. You can see a, again, a link to their research in the show notes. If you're interested in reading that or reaching out to any of them, might highly encourage to do it.

And I'd encourage you to listen to the whole podcast because there's a surprise appearance from both of my daughters and I'm recording this from New Orleans. My mom, just my daughter ran and she wanted to make a podcast appearance. So if you listen all the way in on YouTube, you'll get a quick view of the two cutest girls in the entire world. So we're going to get to the podcast team Doordash in one second. But first, a word from her son says, you know what? Let's just record it right now.

This podcast is sponsored by try trotta.com. I think they're just trodden.com at this point now. It's T-R-A-T-A-com. Look, Trotta is two bysiders getting together and discussing a stock that one of them skeptical on, one of them owns, one of them short, whatever it is. It's two by-siders getting together. I just find them fantastic for when you see a company and you want to know, hey, you know, okay, I read the 10-K, but guess what?

The 10-K doesn't always talk about the problems that a company is facing. For example, if you're reading the 10-K of a SaaS company right now, it's probably not going to mention a lot of like the ongoing implosion that's getting caused by an AI. but if you go read a Trotta to TritScript, you're going to have a guy who's long this talk who says, hey, I've talked to 15 Fortune 500 CIOs, and here's what they're saying in real time about how they're using SaaS or how they're using this company's product

or somebody who's going to say, hey, I talk to 20 people and eight of them are canceling their subscription when it comes up because they can replace it with homegrown AI tools. Not only that, but Trada, you know, there is a dash transcript on there, which I referenced during the podcast and which I use to prep for this podcast. So if you go to trada.com slash dash, include a link in the show notes there as well, you're going to find that transcript. And you can

see, oh, this is why Andrew keeps talking about Trotta. And this is why he likes it. This is why you get it. So look, I think it's just fantastic for researching, for getting up to speed. And if you want to, you know, if you're looking at a company and you want to go longer, you want to go sure, whatever you want to do, you know, it's up to you. This is podcast and investing advice, but whatever you want to do, you can get a Trotta call going and you can go talk to someone who's knowledgeable to stress test, pressure test your case and see, hey, am I missing anything? Hey, Is this case all this resource off? So it's a great product. Go to trotta.com to check it out.

And thank you to Trada for sponsor of this podcast. All right, hello, and welcome to yet another value podcast. I'm your host, Andrew Walker. And with me today, I'm happy to have, I'm going to call them Team DoorDash from the Persian Square Challenge. Team DoorDash, you guys were the winners of the Persian Squary Challenge. So congratulations. I'll just do the disclaimer, and then we can go into intras and everything.

Disclaimers remind everyone, nothing on this podcast is investing advice. There's a disclaimer at the end of the podcast and in the show notes if you want that. So, Team DoorDash, you guys won the Persian Square Challenge. We're going to include a link to your thesis and everything and the show notes and everything so people can go see the presentation on whatever it is. And we'll dive into Dorash in a second. But to start, I'd love if you guys could just go ahead and introduce yourself so people know who you're on where you're coming from.

And ZK, maybe we'll start with you. Oh, hey, hey, hey, everybody. I go by ZK. I was born and raised in China. I did my undergrad in U.S. I went back to China, working renewable industry for five years. At the time, in my free time, I started to do some readings in investing and get really excited about it. So I decided to pivot into investment management industry and doing this MBA in Columbia, which is my dream school.

I'm still exploring summer options at this point. Feel free to email me if you're interested. That's awesome. I think Virgin Square Challenge winner, A, I will mention this. the number of it. It comes with a prize pool, which probably is nice for the summer opportunity, but I know they're in high demand. So email on the link in the presentation, everything. Elliot, I know you were just in New Orleans. You want to go next just because New Orleans is on my top of mind? Absolutely. And thank you, Andrew, for having us on Elliott-Tompress. I am currently an MBA intern

at Alpine Capital Research on the first year going into second-year MBA student at Columbia. before business school, I was a by-side equity research analyst at a long-only with roughly $9 billion of assets under management and did fundamental equity research there and really looking forward to discussing DoorDash and our idea. Cool. And Aaron, why don't you wrap us up? I'm Aaron, Samuels. Like L.A. and ZK. just finished up my first year at Columbia's MBA program

Before business school, I started my career at a family office, was there for a year and a half, and then spent over three years on the self-eyed covering internet and software. And this summer, I'm interning in a couple asset management firms. And Andrew, I heard at least two of the three of you have backgrounds on the buy side and an investing. I feel like that's just an unfair advantage, because I know some of the teams did not have any background. So unfair advantage, I will retroactively give you guys a handy. Captain Daniel. All right, let's turn to the winning pitch. You guys choose DoorDash. I'd love to, we'll dive into the fundamentals and everything, but whoever wants to take this,

I'd love to start with just, what made you guys choose, you know, there are 3,000 U.S. listed publicly traded stocks. I think you could do international stocks as well. What made you guys focus in on DoorDash as the stock you wanted to pitch? Aaron, do you want to go ahead? I can also start. Yeah, sure. We looked at a bunch of names. So our process, I think, between when the class started, we teamed up and when we first submitted DoorDash as a ticker, it was either two or three weeks. And in those two or three weeks, we looked at a few dozen names that we kicked around with various levels of focus. So some names got 10 minutes before somebody vetoed it. There were three or four

companies that we all looked at fairly deeply. And we were screening for a handful of things. So we wanted a company that would be one easy to stand in front of a judge or the stock pitch competition and explain the business model very easily or a business that somebody would already know because we didn't want to waste time, plenty of complex business bottle. We wanted, we were thinking about risk reward asymmetry. So if everything goes right, how much money do you make? If everything goes wrong, how much can you lose? And then we also just get in the stock pitch competition and we'd have three months to look at these names. We wanted something over we thought we could do a lot of research on the key issues that actually matter to the stock. So for DoorDash, you know, we looked at this business as U.S. restaurants, international, and new verticals,

and we made a list of all the different things that we can do to get at the key issues around each of those segments. And, you know, what really drives the model. And we thought, okay, well, there's a lot of channel effects we could do. They could do a survey. We could try to scrape some data from DoorDash's app. This is a good one. and Ellie and ZK jump in if I missed anything. I think that's how I would describe our sort of process

in choosing DoorDash. I think we turned over a lot of stones in the very beginning and were very open to anything and everything. I probably was really annoying for Aaron and ZK. There were a lot of ideas I wanted to work on and being on the by side previously. So I use this as an opportunity to be like,

this idea looks really interesting. I haven't done any work on it. It would be really, you know, what do you think? What do you guys think of this? So we did a lot of that stuff at the very beginning. Look, I just want to say into what Aaron said, and obviously this was the whole team's process, but it's no surprise you won because I'll have a lot of people with pitches or when they're kind of, you know, doing by side interviews, they'll come to me and they'll have

a write-up and they'll hand it to me and I'll be like, dude, this is cool, but you're pitching, let's do something crazy. You're pitching a complicated biotech long that requires like a, Ph.D. in science and you're out here saying, hey, the market's at a 40% chance that this succeeds. And I think it's 70% based on, you know, I've got a background in molecular sense. Like, you're going to be pitching to mouth jewelers like me that haven't taken a science class since, you know, senior year of high school. Your research might be great, but they can't understand this. Or, you know, you've got this complicated roll-up story in a really niche

industry. You guys show something that everyone understands, right? Not only does everyone understand that everyone probably uses it. Everyone understands, as you said, asymmetry. You can build it. And the other thing, and we'll discuss this in a second, you can do a lot of primary research on this thing. And I think, like, it was maybe you guys think this is trading it 100, and it's worth 400. But even if you found something that was trading 100 and worth a thousand, like, this is just a better pitch. It's a better stock story. So I apologize you guys, like not just for the work and stuff, but you kind of knew the game you're playing. I think that's super helpful. ZK., did you have anything you wanted to add there? Should we dive into

Nordash? Oh, and that seemed to add just double click on Elliot. It wasn't bothering for us. It was actually very interesting for us to flip through all the stones and that's all. And now it was interesting. At the time, it was probably pretty bothersome. All right, so let's go to DoorDash.

I'm sure most listeners, you know, but they're probably listening on an iPhone or a phone. I'm sure they know what Jordash is. But let's talk about what is Jordash and why are they so interesting? Yeah. DoorDash is

the largest U.S. restaurant player. I mean, to Aaron's point, I think we sort of didn't have to spend any time on the company overview. Why did we think it was interesting? We sort of have three reasons why we think it's good to own Dash right now. First is the U.S. restaurant growth. We think is more durable than the street thinks. Second, we think that new verticals in international will reach profitability earlier than the street thinks.

And lastly, we believe that there's an underappreciated margin expansion from OPEX leverage that the street also doesn't appreciate. So there's kind of the three things that we see that lead us to it's misunderstood. And this is why it's interesting. Perfect. Look, those are three things I've got notes on. So we can start diving into all of those. But so you laid out three things there. What do you think?

It's hard to boil that down to one. But what do you think is the one key insight that you guys have versus the market has that kind of makes this a risk adjusted out of opportunity? The biggest one we think is that the U.S. restaurant growth story is still in the middle innings. There's been a narrative in the stock that, and this has been the case for years where people think, okay, U.S. food delivery is pretty penetrated. And Doordash has continued to post really good quarters on the U.S. restaurant side. We get a lot of work on the user base and frequency and trying to understand how many people are using Dash on a monthly basis today, because they don't disclose it for the U.S. specifically. Where could it be five years from now? How many times a month are those active users ordering?

And where could that feeling be? And thinking about that, that's probably the biggest driver in terms of our numbers versus consensus just because U.S. restaurants is. the biggest part of the bit this. All right, let's dive into that thing. I thought that was a really interesting, and I believe there was, I think you guys did a trot to call and prep for this, that I'll reference a few times

because I thought that was interesting, but you talked about, hey, it's not just, the user base, like as the U.S. ages, and you think about a 75-year-old kind of 18, we'll use the term of the C, aging out, and an 18 to 22-year-old aging in, even if the U.S. population is flat,

replacing that 75-year-old with a 22-year-old, Ashley is taking a user who, I mean, my parents actually dooredash a pretty good bit. I'm taping this from New Orleans. I've been surprised how much we're door-dashing, but, you know, a 75-year-old in general is going to dooredash less than a 22-year-old. So can you talk about those dynamics? And then I do have another thought on, I do have another thought on the restaurant dynamics I'd love to take. So on the user-based side, and, you know, where we'd always be, like, skeptical of the

company says, oh, well, the population is growing. So that's a good thing for our business. But for George, we actually think that those demographic in the US are a pretty big hill end. Just given every year, about four million people in the US are turning 18 or they're maybe graduating college or graduating high school and getting their first disposable income or joining the full-time workforce,

it's about four million a year. And just that Gen Z cohort has grown up in an on-demand world in terms of the third party data that we've seen. And then of course, like anecdotally, yes, they're thinking about that. We think that a 20-year-old is just much more likely today, if they're hungry, think, oh, let me check my phone

versus somebody who's 70 or 80. So that's 4 million people a year. In our model, we do, I think it's about 40% of the NAU growth of years coming from, demographic trends and we also saw some data that showed that younger people um specifically i think it was 18 to 30 they're more likely to be using door dash than uber eats or grubhub so door dash already is the market leader but within the younger demographics door dash has even slightly higher penetration what do you think to younger people are using door dash more than uber eats or grubhubhub

I think they understand that it's a better product. Then this is also just maybe me speculating. We didn't do a lot of work to understand why that is. But when we look at Giorash, from every angle that you slice the product, it's better. So the delivery feeds are faster, ease are lower, merchant selection is better, also more satisfaction on surveys or higher. You know, older folks, they might not. totally understand that.

They might just think, well, it's a food delivery app or I already have Uber on my phone, so let me just download Uber Each as well for that integrated experience, whereas younger people, maybe they're just a little bit more savvy and aware and they've picked up on those product differences over time. But if I missed anything or if you have any other conjectures, D.K. or Elliott, sleep, let me know. No, I just emphasize that we did so much work to comp the product. product quality to Uber and Grubhub in the U.S. And it's just very clear across everything that management has been maniacal about making this product amazing.

And that's kind of where the evidence points us. It's funny you say that because I'm in New York City. You know, I've been there for 15 plus years. I was a longtime seamless user, right? And then DoorDash, I think I got a free DoorDash membership through my Lyft partnership or ChaseSapp, which came from Chase Sapp. And we'll talk about that in a second. But basically, I only use DoorDash now. And I wasn't sure.

I don't know when I made the Switch or why, but as you say it, like, the DoorDash product, it is just simpler. Like, it is cleaner. The seamless product is kind of clunky. Uber Eats. You know, I've got to click through it on Uber or go through Uber Eats. I think the products. So it is funny because when I read this in your deck, I was a little skeptical, but kind of as you all laid it out.

It's kind of like, well, you know, reveal preferences. I've kind of lived this and made the choice with my own wallet that orders DoorDash a lot more than I would once admit on the podcast. ZK., anything to add there? Should I go on to the next? Yeah, nothing to add.

Okay. You know, so I do hear, let's go back to the restaurant growth story, right? I think, as you said, as Aaron said, and you guys kind of have supported, your story is the street, and I think they've been saying this for the past two to three years, thinks restaurant growth has tapped out,

and you guys are saying, hey, there's a longer run. And I do hear you on the demographic trends, but ultimately, you know, if you think about replacing, let's just say 4,75 year olds with 4,023-year-olds who are more likely to order every day, every year, that's nice, but that's like that tailwind is kind of low single-digit growth, right? And then you get GDP plus. So you're talking, you'd be talking about a mid-single-digit grower. I'm going to do that, I'm right?

You need increased penetration to really, you know, increased order and frequency to really drive this here. And I think you guys see that, and I think the past years have burned that out. But I would kind of push back and then say, hey, you know, COVID is the most I've ever ordered and had stuff delivered. If we're past COVID, like we are already in the door dash world. Like, it is one of those things. Instagram, you can always take 30 more minutes and stay up late at night. Like there's three meals a day, maybe two meals in GLP one world.

I don't know. But how much more room is there really for there to penetrate and for people to order through the DoorDash? Hey, Aaron, I think you're on mute right now. Oof. On the frequency side, that is a big piece of the puzzle. So for U.S. restaurants, we estimate that in 2025, the average monthly active, monthly active user was ordering roughly five times a month. And we're modeling that kicking up to six. And we got at that number a couple of different ways. You spoke to a lot of people in the industry, and we spoke about trends that they're seeing and ask for their forecasts.

DoorDash also publishes some cohort data from time to time. We also got to look at some third-party data. And you do see that the longer somebody has these apps on their phone, the more they'll order on average every month. So the growth that we're modeling and frequency, it's only 3% a year, which we think is reasonable. We also looked, and we understand the market's different, but we looked at Maytuan and China.

And we saw that their monthly actives were ordering eight or nine times. a month and of course delivery fees are lower but the fact that china is at eight or nine today and we're modeling the u.s getting to six over the next four years that seemed reasonable to us but the big growth driver really is um good users so on the frequency side we're modeling three percent kegger on the monthly active user side we're modeling eight percent keager um and that's coming from a combination of the demographic dynamic like we talked about that's uh i was just pulling up the numbers it was about 45 percent of the monthly active growth that we're modeling the rest is coming from share gains relative to uberates and other competitors

and then also the dynamic where in the uf today there are a lot of people that are ordering three or four or five times a month so if some sorry three or four or five kinds a year so if you're ordering four times a year you're only included in the monthly active user account 33 percent of the time well if that person kicks up their order frequency over the four or five year period, I'll show up and not be active more. So those are like the three buckets that we thought about user growth then. And that really is the big driver.

And then order value, we're modeling that, ticking up actually a little bit slower than forecasted inflation, just because you've kind of seen basket sizes remain pretty stable over the past two years. ZJ, did you want anything there? I think that's reasonable. Yeah. Let me, I want to turn. So I think the other places we talked about were new verticals and international.

And I want to talk about them both. I think particularly on international, it was the most interesting piece of research, primary research you did here. But let me turn something completely different. You know, we mentioned that they have better products. And I can't qualitatively prove that or quantitatively prove that. But obviously my experience of the talk about says that. But, you know, if I was just looking, if I'm, and I am looking at this.

company. It's about 70 billion market cap, if I'm doing that math correctly. Trailing EBITDA is about 3 billion. It is growing nicely, but the 3 billion is pretty heavily adjusted, right? You've got 2025, 1 billion stock comp. I think 2026, they're going to do 1.3 billion. There's, they are doing a whole system remodel, but, you know, there's a billion of LTM cap X. There's 1.3 billion of capitalized software. So if I just add those numbers up, you know, I think somebody who said, hey, somebody said, hey, I do stuff on Gap accounting, would look at the seat. Well, this is at best break even and at worst, like slightly negative. And yes, you're going to grow nicely.

And yes, you're going to get a lot of operating. You're probably going to get some operating leverage. But, you know, you're starting from $70 billion on non-gap numbers. You're at 25 to 30 times EBITA. Obviously, there's taxes and everything. On gap numbers, you're at infinite. I think people would push back, start and say, hey, this is a pretty rich valuation for, yes, maybe there is good growth coming from

MAUs ticking up as we talked about and from increased order frequency, but it's not like this is a completely clean playing field, right? So how would you respond to somebody who was kind of talking about just valuation there? Yeah, on valuation as a whole, we think there's a lot of messy stuff going on at the EPS level.

The street really comps to EBITDA. we we see it as where it's trading now we think there's going to be multiple compression over time if we're going to be conservative evaluation so our target multiple at 10 times leads us to a $320 roughly price target in 2029

but we sort of weren't comfortable there we looked at price free cash flow we think at the end of the day free cash flows or cash flow is king. But we also think that stock-based comp, because this is a stock-based comp-heavy business,

we think that's a real expense. So we took free cash flow less or minus stock-based compensation. And at 10 times our earnings, or EBITDA, that kind of implies an 18 times free cash flow multiple. So,

that's where we kind of got comfortable with the valuation. And these are our terminal multiples. So we kind of threw out, we didn't throw out. But we kind of thought, okay, how much this business can earn in the future? And what's a reasonable valuation over time? Dude, I mean, look, 18 times free cash flow on a terminal and it sounds like you addressed it for stock comp and everything. Like, that's below market multiples now.

So that seems reasonable. I do have one other question, but if anybody has anything else on valuation, I kind of want to cede the floor. I would just jump in and add that for the purposes of these stock competitions, what you usually see is people look at a company and they put a three or a four year price target on it, though we did have the benefit of looking further out. So our valuation is based on our 2030 forecasts. So, you know, this is a company that's going to be compounding evita over 30%, we believe, for the next four years. So that certainly helps. And that's what got us comfortable with, you know, choosing DoorDash and underwriting it is, well, if we were to make this investment and then not look at it for three years, we think this is going to be a much bigger and more profitable business. And, of course, we did analysis around the downside.

Well, what if we're wrong and it stops growing and there's no margin expansion? And for sure in that case, you know, you're not going to make money, but we do think that the risk reward is good, but just wanted to kind of address that to an evaluation piece. Let's talk the downside. So you laid out a downside where it stops growing and no margin expansion. And I actually don't think that's the most likely downside here, right? I think the most likely downside would be, but you do have competitors, right?

There is seamless. There is, or seamless, Gralbop, I don't even know who that owns anymore. It's funny that used to be dominant now that's a, but there's Uber Eats, Instacart, you know, we'll talk to new verticals in second. DoorDash is going into groceries, Instacart's going into delivery. And the one I really think about is like,

look, my membership, as I mentioned earlier, comes through either Chase Sapphire or Lyft. I got the DoorDash membership. Amazon with Amazon Prime, I know I get a seamless membership. So I'm sure that's seamless crumbum. I know I get that through Amazon. Like I do wonder, there's Uber, which you get the Uber Eats membership.

I do wonder if this is like kind of a bundled product long term. And I keep thinking about Amazon, you know, a couple months ago, they came out and they said, hey, we're going to open up our logistics network and we're going to let people kind of use it for shipping. And all the trucking companies got crushed. And especially all the less than it. I do wonder if a year from now you open this up and. and Amazon says, hey, you can use our app not just ordered groceries from Whole Foods,

but we're going to use our logistics to deliver from other grocery stores. That seems a little niche, but Amazon says, hey, what happens if you wake up to our fresh lease and it's Amazon has bought Seamless Grubhub, and now they're rolling it out and they're going to use all the little Amazon, and maybe I'm too city buyers.

They're going to use all those little guys on city, Amazon City bikes who will also stop at a restaurant and deliver fees. Like I keep wondering what happens in a decently competitive space that DoorDash needs to be dominating, but what happens if that happens or what happens if Uber Eats goes to Chase and says, hey, you guys have the Lyft,

DoorDash partnership, we're going to give it, we want to take that away from you. And you wake up and all those Chase Saffi remembers, like me, it's easier for us to just use the Uber Eats app. Like, how do you guys think about the competition along those lines? I know I laid out a lot of different competitive, but I'll let you guys take it from wherever you want. Yeah, I can start there.

So I think there's two points. really first on Amazon, Amazon is this huge GOV player or GMV player. And DoorDash is that, you know, we think they get to roughly $130 billion in GOV, just a niche for Amazon. We had an expert call with a relatively high-up Amazon exec, and it kind of felt like Amazon or DoorDash is too small of a player for Amazon really be super concerned about. They're focused on the big sort of Walmart type competitor and compete in the way. I mean, I hear you, but I mean, DoorDash is attacking all of restaurants and they're moving into grocery delivery.

And I mean, Amazon, this is years ago, but they bought out diapers.com and, you know, their fight. I hear you on this is small compared to the overall Amazon, but DoorDash is a $70 billion market company. You know, even $70 billion, it was on, I'm looking at it, is a $2.8, what is that trillion dollar company, but $70 billion is still like kind of meaningful for that? And I'm sure for a product manager, two levels down, like that would be, you know, he'd be five-xing his empire if they started moving to that. So is it fair to say it's too niche because it's a pretty damn big marketplace they're attacking? I can add on top of Elliott, and we talked to some senior partners at Instant Card. And basically, he said that the grocery delivery is a growing and big market. And he expects all the players in this space to do well in the next three years.

And we will definitely keep monitoring that competition landscape. going forward, but based on the current evidence, we think the competition is not kind of the headline concern over there. Let me pivot into something completely separate. You guys did, and again, we'll talk to international where I think you guys have the coolest work in a second, but you guys did a lot of primary research here. And one of the things I tell people when they're either applying for jobs or doing these dot-coms is you want something that grabs people's attention.

And the way you do that is kind of not with MNP. I am the, hey, you know, I bribed the CEO and here's what the quarterly earnings, but it's something that you know that kind of you can't find in this MK. I think you guys did approaching a hundred primary research calls here that just like really jumps off the page. So I just want to ask, and anyone can start on this. Can you talk about the primary research you did, what you kind of learned from it, where you focused on, and how you built that into your presentation? Sure. So we, um, to your point, we did do a bit on under 100 calls.

Did you say under? Did you just say under? Aaron, you got to round it up to 100, man. I think we did 90. I feel like that's for me too big to round. But anyway, we understood just like how valuable these would be to really get under the hood of the business and getting at the key issues. So we focused on former DoorDash employees, current and former employees at all of their

competitors. We spoke with a bunch of merchants, which really is valuable to just understand, you know, all they think about Ador Dash versus an Uber Eats and understanding commissions and how the salespeople interact with them. And then we also did, we counted this in the 90. We did calls with few investors that own Dash or professional investors and a couple of cell side analysts as well that cover it.

And that has informed a lot. of things in our model. There are a few examples that like we'd be happy to walk through, but probably some of the best and DK mentioned that we did a few calls on the grocery side specifically, which is DoorDash's new verticals basket. So there's some third party data that we got access to that talked about what grocery basket sizes are. And the unit economics for a grocery order is different than a typical restaurant food delivery order because the dasher, the courier needs to walk through the grocery store and pick things off of the shelves,

so they need to get compensated for their time. And the grocery commission rate is lower than what a restaurant pays. So restaurants, if you order a restaurant through the Jordash app, DoorDash gets to keep over 20% up the subtotal. It's less than half of that for a grocery. order. So all of us to say you need a much higher basket size to make the math work in terms of getting grocery or new verticals profitable. So we started with the question, okay, so how high do we think AOV is going to get? Average order value is going to get on the grocery side.

So we did calls with people in the grocery space, including current and former Istrocard employees. And we got a sense of how they grew their basket sizes over time. And we asked them about what they're seeing from DoorDash. And Jordash, our understanding, basically, So the third party data is that average order sizes, basket sizes, were in the 30s three years ago. And now it's approaching a little bit north of 50. So, like, how did they do that? And are they going to continue growing it? So that's one example.

And that totally impacts our model. And it impacts the timing of when the new verticals segment, or at least as we define it, becomes profitable. And, you know, we could talk about that for, you know, K-Krate. The calls really informed the forecasts in our model. And then in terms of orders and even on the monthly active user side, some of the tiddicks that they got from these calls impacted the KPIs that really do drive the model and the outside that one modeling. You mentioned grocery a few times there.

So let me just go to that. You know, they're going into a lot of new verticals. And I think you guys think the new verticals are one of the reasons you're recommending to stop. You know, again, I was reading that Trotta call it mentioned. And he kind of gave on something that had been tearing out the back of my mind. the restaurant delivery business is a really good business. You know, you think about it, and you really need, like, the old booking thing. You know, why is booking in the U.S.?

Not as good as booking in Europe? Because in the U.S., there's six hotel chains that were really dominant, whereas in Europe, it's a lot of small pops. So you have to go get, like, thousands of hotels on your platform. Restaurants are similar, right? If you have one Thai restaurant and one burger restaurant, that's not enough. You need, like, in New York City especially. And again, maybe I'm to New York City buys,

but you need all the Thai restaurants. And the restaurants are constantly opening and closing. So you need to be refreshing really quickly. That is a difficult business with high order frequency. You know, I think you guys mentioned five times per month. I'm a little bit above that. But, you know, high order frequencies to the person's ingraining that, they've got an ingrained habit where they're used to opening the same app,

ordering it. They've got their favorites versus if when you're going into grocery. So restaurants are great business. Grocery, you know, maybe you're ordering it once a week. It's a big order. So you might think about it. you might price shop. As you mentioned, there's this shopper actually walking through.

So there's a bigger service fee, whether it's, you know, it's either going to get charged by DoorDash or it's going to be baked since the price. And, you know, I can push back. Hey, if you're paying a DoorDash for an hour of your time, that's an hour of your time. That's yours. But we should talk about that later. But, you know, it's a harder business. It's lower margin. There's only going to be three to five grocery stores that matter.

So it's very competitive. So anyway, what the Trotter call was saying was, hey, you're moving from this great business. And every kind of vertical that you tack on. adds the TAM, but it's a worse business. So what would you guys think about kind of that conjecture when I'm pushing back on the new verticals as kind of a value driver or a growth adder? I think that's true.

I think it is a worst business, but it has a massive cam, and DoorDash can approach it. They're very focused on payback periods and making sure that they're... the rate of return that they're getting on these investments, are exceeding their cost of capital.

DoorDash is maniacal, in terms of our understanding, speaking with former employees about budgets and making sure, okay, this product is going to get this amount of capital and we need these KPIs by the end of the year. And if they don't hit it, that product will be either de-emphasized

or potentially they'll bring in new leadership to make sure that the next set of KPIs are hit. They're really focused on it. So grocery, they wouldn't be attacking this market if they didn't think that the payback was there, but you're right that the returns in some of these newer verticals, they're probably not going to be what the return our capital was when DoorDash was investing in US restaurants in the early days.

One other piece there, we've seen DoorDash pretty publicly exit some markets. So there were full of markets that they exited internationally, earlier this year, we view it as a good thing. It shows that management's disciplines, they're not growing and over fist, ignoring the path to profitability. If there's a market or a product or a new vertical where they're not going to be successful, management will walk away. And we actually view that as a pretty good thing. And also to add to that, so we see them in new verticals is losing like $1.5 billion right now. And in our sort of period, getting that $320 price target, we agree with you, Andrew, that it's not as good of a business.

We're kind of saying it just inflexes in profitability in like our terminal year in that three-year period to get to that $320. So there's this kind of profit whole management is maniacal about everything, getting efficient, getting profitable. We think that happens over time. But we don't necessarily. We see the profit improvement, but to get to that through to $20, it's not this crazy thing that it's gushing cash in 2030 or something. And you mentioned management a lot. And I've heard somewhere, right? You guys have a slide in your deck that says, it's got a great poke from a cell side analyst, I believe you talk to that says, hey, outside of maybe Jeff Bezos and to Toby, the guy at Shopify, Tony, the CEO and founder of DoorDash is the best CEO in, like, Killer A-plus.

I have heard absolute similar things. You know, if you read somebody's got a bowl pitch on DoorDash, often the first line is Tony, Tony, Tony, tone. So I want to ask you guys, obviously you like the economics. You like the business. You think there's a lot of growth they're going to win in Catterboros. How much is this a DoorDash bet versus, you know, Berkshire Hathaway? There are people who love the railroad business,

who think the insurance business is advantaged. But Berkshire Hathaway until today, because Buffett's gone. but Berkshire Hathaway was a Buffett bath. So how much is this a DoorDash bet versus a Tony bet? I think all of this was made by Tony and the senior management team. So I think to sub-level, this is a Tony created this and management team created this opportunity going back to 2013, starting this at Stanford GSB. But the opportunity is there that they created. So we do believe in the narrative

in the economic prospects of the business, but I think it's a huge part of what we're, quote quote, betting on. Do you all, Aaron, D.K. agree with that? Yeah, I do, and just to maybe state it differently, Tony has created a culture of operational excellence. So we spoke to, like I mentioned, a lot of employees at DoorDash,

A lot of employees at DoorDash and a lot of employees at competitors. The amount of detail that DoorDash employees can get into about their job and their function and how it ties into the broader business and the KPIs, it's really noticeable. We did a call with somebody who had been at DoorDash for three years, and then a call of somebody who's currently at Uber and she was there for three or four years at like similar levels, late 20s, so like first or second job out of college. It just, these were back-to-back calls. And it just stood out.

Like, the Uber person could explain what they did and like a little bit about their team and how it fit into the broader picture. Everyone that we spoke with at DoorDash really gets what's important. I mean, we think it comes down to Tony. He's created that real focus on data on really being the best and trying to optimize everything as much as you can.

And it does show up, I think. in terms of like those product advantages, no, we would be definitely disappointed if Tony left. That would be probably not great for the business. We do think that he's kind of instilled that real focus on data and analytics and just being really, really focused on execution. So it's maybe ingrained in the culture to an extent at this point. Again, it's just funny. Like Uber, I don't think anyone would ever accuse Uber of not having a lot of brainpower or

the apps being like the company not being data driven all this sort of stuff. But again, this is just my revealed preferences. But the DoorDash app when I open it, it's just it's easier to use. And I did it unknowingly, but I started using it. And that is a credit to the team and the founder and all that sort of stuff. You know, there is one other funny thing. Tony gets paid. I'm looking at the, hey, Tony is 41.

So if you're betting on the horse, like it's kind of nice. You've probably got it. I mean, who knows what the future rules, but you probably got 30 more years of Tony running this, assuming some people do like to retire when they're in their mid-50s and their billionaires. But the other funny thing is, he makes, I'm looking at the proxy, he makes $400,000 per year, right? All that, $400,000 per year.

His CFO makes $14 million per year. And I was kind of like, look, if Tony ever left, you'd actually have to adjust your models because a new CEO would probably make, if the CFO is making 13, he's probably going to make 30 to 40 million in stock comp. So you'd actually have to add in 30 to 40 million. And it's just a funny thing to think about it. really swing it one way or another, but anything else you guys want to add on, Tony, or I do want to make sure I hit International before we kind of wrap this up.

I just want to kind of add on the compensation. You said to see the other executives are earning like low teams, million compensation. I just want to point out that excluding the CEO, the average target compensation, is consistent of 4% cash base base cash sales. rate. And 96% are equities. So they're we're aligned with shareholders. It's a great point. You know, again, I'm looking at their proxy, but every C-level person makes $350,000 in salary, and then everything else. And I mean, everything else is stock comp. And I don't know if it's

options or PSUs or whatever it is. Like, this is a, we are getting the stock to go up. Like, everyone is aligned. So I think that's a fantastic point. And I'm pretty sure you guys made it in your deck as well, but it's an awesome point. Like, they're, my least favorite thing is companies that aren't eating their own cookie. You know, I've been doing the StarCard series, and there's so many companies where if the stock goes up, the management team will get filthy rich, and if the stock goes down, the management team will get quite rich. And this is, if this stock doesn't go up, I mean, these guys, I'm sure they'll have second jobs,

but they're going to be very safe. Let's go to international. DoorDash has done some international acquisitions recently, and I want to talk about the international opportunity. I also want to make sure I talk about the one of the acquisitions was, is it Walter Volt? It's WOLT. I don't know if it's Walter Vault. It's Volt.

Okay. But you guys did great work on kind of how that acquisition evolved over time. And I think I heard from several people who were impressed with just how you guys tracked, the market share, their margins and everything there. So I want to make sure we hit that. But whoever wants to start can take it. But what about the international opportunity for DoorDash? I can start with it, and Aaron and Elliot can add on what I talked. So Dorash basically acquired Volt back in 2020, and we did a proprietary case study on that.

We use a mix of third-party data and our own primary research to kind of to analyze what's the post-acquisition market share gains with Volt. And the data shows, okay, all the market with researched Volt has gained significant market share. Interesting. What interesting aspect about it is we actually found out in Denmark, the international conglomerals need to disclose their Denmark subsidiary. So that's, you know, kind of we know how Bolt has been doing better in Denmark. And on top of that, we use third-party data, so kind of gets to the conclusion of VOT has been doing really well post-acquisition. And that also being confirmed by talking with VOT,

former and current employee, which is a Dorash employee. And we also talk about to delivery employee, about the potential execution risk, what are the challenges they're facing? And in our research, we believe DoorDash can solve all of them. So when delivery, sorry, when Deliveroo employee talked to us, said, oh, Uber is just subsidizing all the restaurants. They have signed exclusive deal with all the money,

but they cannot fight back. And with DoorDash, which can provide ample cap capitals to deliver rule, I think that challenge will be my ticket. Aaron and Ellie, feel free to add up. No, I think that was great. I mean, the key point that we're making is DoorDash has done a really nice job of integrating and running Volt. Now they've put capital to work with Deliveroo, and we trust that there's a playbook there, that they're going to, that they know how to acquire a business and integrate it and run it.

And, you know, all of the operational excellence that we've been talking about for U.S. restaurant, they'll find ways to apply it to these new markets that they're entering inorganically. Look, I feel silly saving it to the end because, again, I run and I was like, this is a really good case study. But I don't follow DoorDash super crowsly, but, you know, you see them to the Trotter Call and I heard it from several other people. They're like, this Walt's analysis is really proprietary and really interesting. So that's awesome. Let's see.

International. I do want to mention one other thing. you know, Tony talks about, hey, we bought Deliver, Vival. We could have just, like, kind of mashed them together into our systems and had a lot of technical debt and stuff, and that would have been a lot simpler. But instead, they're embarking on this whole company, you know, basically an ERP, not ERP, but they're basically redoing it and upgrading their whole tech architecture, and that's expensive. And they've talked about that with AI as well, right?

We could have just slapped an AI thing in there, but then our systems would have been more brittle, I believe is the way to say it. And what we wanted was a malleable system around A&I. AI. Do you guys just want to talk about, I don't even know what there's talk about, but I think it's really, it's instructive of an owner operator who's owning this and thinking of the long term. It's instructive of, hey, maybe the income statement right now is a little bit under stating what the actual earnings is. But wherever you guys want to go, I'd love that. And then I have one last question before we kind of wrap this. Yeah, to your point, DoorDash. Go ahead, Aaron.

DoorDash is in the middle of a pretty big reinvestment cycle. So right now you have the DoorDash app, the Volt app and the Deliburu app running on three different tech stacks. And what they're doing, if they're integrating them and bringing them onto one consolidated tech stack, and it's very expensive. They haven't given an exact number, but we think it's going to be about $300 to $400 million in R&D and other expenses to do this. We do this as a really good thing to create long-term intrinsic value. there's, I mean, the simple example, to ship a feature onto all three apps.

Right now, there's three teams of engineers, probably one in San Francisco and one in from maybe London and one in Finland that needs to go ahead and do that. A year for now, there will be one team of engineers that could do that to all three apps. And you think that's going to drive pretty significant leverage. But this reinvestment cycle is a huge part of why the stock is. is down so much from the peak. DoorDash talked about these stepped up investments of their earnings in November of last year

and gave some color about the size. And that's a big part of what the stock has been sold down on. You're seeing incremental margins lower this year than last year, which certainly scares investors. But if you kind of look through the one-time nature of these expenses and we think it's going to really help them drive significant leverage in the coming years, we view it as a positive

and talking about sort of betting on the jockey and Tony's Hugh, there's no CEO that we'd rather make this kind of big tech investment to have a better, more efficient platform that they'll be able to use the benefits of these investments for many, many years to come. Really well said. Elliot, did you want to add anything there?

Yeah, I think it was really well said too, Aaron. I guess the only other thing I think of is why are we so ahead of the street? Like, yes, we're meaningfully ahead of the street just with all the other stuff that we talked about. But since that November released a report of the tech integration, integration of the TechS Act, EBITDA in 2027, 2028 is down 11, 12%,

and has not rebased. And in 2028, 2029, 2030, we're like 16, 17% above the street. So yeah, you can see where, you know, we have a bullish view, but we see the streets terminalizing this as like a big expense and are kind of dragging their numbers through on their spreadsheets. So that gets us just that much more variant. That's great.

Let me last question I'm going to ask. It's funny because the Q1 call basically becomes a rebutter. Rebuttal. Oh, look, my daughter decided to join the to join the podcast. Hi, Sylvie. Do you want to say hello to everyone? Say hi. All right.

Both of my daughters are here. Come on. Bye, guys. Have fun at the aquarium. Sorry about that. But last question. So, Satrini publishes a piece in end of January, early February, that says, AI is going to eat everything, right?

And DoorDash is actually prominently mentioned. And they say, hey, you're AI agent. You'll just go tell it, I want Thai food. And you'll go find the cheapest way to get the Thai food deliberate. And the company spends a little bit of it. lot of their Q1 call talking about why Cetraini is wrong. And ultimately, I'll reveal my bias. I probably think they're wrong.

But at the same time, you know, when I was ordering DoorDash, we got a pizza. My daughter chis around in the room. We got a pizza because she loves pizza the other night. I go on DoorDash and the pizza is 30 bucks on DoorDash. And I say, man, I'm in New Orleans. That's kind of expensive for DoorDash. So I go check the restaurant's website and it's $24 if you get real old fashioned call them up or order through the restaurant website.

And honestly, I almost still ordered from DoorDash because it's a a lot more convenience order from DoorDash, but I was thinking when I saw this and I was pregnant to the spot, I was like, man, if I had an AI agent and I just said, find me the cheapest way to order that pizza, it would have cut out DoorDash completely, right? So I threw a lot out there,

I probably biased the witness a little bit, but I'd love to just talk about the Citrini AI is going to, agents are gonna run everything and replace DoorDash. Whoever wants to start and talk. I can start up. Or go ahead, Aaron. Okay.

So, I mean, our view is that a three-sided network is super powerful and is more than just a delivery app. The building a local three-sided network requires significant acquisition costs for careers, merchants, and consumers. And that the barrier to entry isn't actually the software. It's the actual network effects. And this is a three-sided network. And we believe that Citrini mistakenly assumes that after driver costs, the delivery fees effectively all flow to profit. And that's just not true.

Like, there are so many costs like driver insurance payment processing infrastructure that no entry can really escape. So, I mean, we believe there's a lot of things that are wrong about the Citrini research report. If I'm just hearing you three-sided network, consumers on one side, merchants on the other, dashers on the dashes who are actually delivering the product. any last time. It feels to me like what you're saying is it's actually the Dasher side of the network because I go to AI and say go find me pad's high near me. It can Google that or it can find that. Obviously, the consumers are going to AI.

But it's the dasher. It's the getting somebody who is actively available to go pick that up and deliver it in the quickly on time, all this. It sounds like it's that piece of the network that you think is the toughest for the AI agent. Um, kind of. I think there's just so many little things in the physical world that happen. They can't just be vibe coded away. That like, for example, the handoff from the merchant to the courier to the consumer, there's so many little things that go wrong all the time in this business.

And Dorash has done a really good job of executing amazingly. So it doesn't look like there is But it is so hard There's so many little things that are just Messy that it would be I think a total mess For something like a vibe code or just vibe code up And look you know hotels I have thought booking might be Sessitual but hotels is you just need the hotel

It's 250 a night versus you know getting a burger delivered is 1250 So there's a lot more money there There's not the Dasher side. I completely agree. Aaron ZK, did either of you want to add anything there? I just want to touch on this kind of, we describe it as a potential shift of the top of the funnel. I think management really double-click on our view in the latest earning that Google has done food delivery since 2013. and put more emphasis on that during the COVID,

and it shut down in 2024, citing that they found it was really hard to change the customer behavior there. Not only Google, but by thence, they tried food delivery back in China similar in 2021 and 2022, but it did prioritize it because internal resource cannibalization. So all other talents, they don't want to do. work in a very, you know, hard, operational heavy side of the business. And there's insufficient customer might share there.

So customer don't think, oh, I want other food. I need to go to TikTok, something like that. So history kind of suggests that when the way customer interact with the internet change and they want to do something with food delivery, it didn't succeed. I mean, it didn't succeed. But we will just keep monitoring that. progress one forward. It's good.

I am laughing at ordering food delivery from Ficktop because I would be very scared of what type of food you would get. Guys, I know I've got to stop. I know a few of you have a stop. I'm just to say, hey, congratulations again. Great work. I mean, I think you did great work. And I think you, in particular, just aimed it for this.

And it's no surprise you want. Please, I'm going to include a link to your write up, your presentation, everything. Emails for all of these guys. Again, their first year is going on second year, Columbia MBA students. I'm a little jealous because ZK said it was his, dream school. This is a dream school too. It was my dream school too. I just, I never applied or went and got my MBA, but I'm quite jealous of you guys. So world's your oyster. Congratulations in guys. Please go see their links. Reach out to them and we'll talk soon. Have a good one,

guys. Thanks, Andrew. A quick disclaimer. Nothing on this podcast should be considered an investment advice. Guests or the hosts may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial advisor. Thanks.