Online food delivery company DoorDash’s (DASH) shares have popped on the back of growing optimism surrounding the company’s international expansion. However, concerns related to massive labor shortages and higher Dasher acquisition expenses make its growth prospects gloomy. So, given DASH’s weak profitability, is the stock due for a pullback? Read ahead to learn more.Food delivery platform provider DoorDash, Inc. (DASH), which is headquartered in San Francisco, is known for offering an array of services that connect merchants, consumers, and “Dashers” in the United States and internationally. DASH’s stock has gained 18.2% in price over the past three months with growing investor optimism over its plans to acquire Helsinki-based technology company Wolt to accelerate its product development and increase international scale.
However, closing yesterday’s trading session at $215.25, DASH’s stock is trading 16.3% below its 52-week high of $257.25, which it hit on November 15. The stock has declined 12.5% in price over the past five days.
While the gig economy’s growth, spurred by the COVID-19 pandemic, boosted the company’s business, DASH’s revenue has decelerated significantly over the past few quarters. In addition, growing driver acquisition spending due to a shortage of workers, and an increasingly crowded market of app-based gig economy companies, could negatively impact its business. So, the stock could witness a pullback in the near term.