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DoorDash Inc. (DASH) , a leading platform in the local commerce and delivery sector, will release its second-quarter 2025 results on Aug 6. The shares are already up nearly 50% year-to-date and almost 140% over the past 52 weeks. Now trading at a lofty 9.4 times trailing 12-month revenues and 192 times adjusted EPS. Can the remarkable outperformance continue? Analysts anticipate second-quarter revenue of approximately $3.1 billion, representing more than 20% year-over-year growth, and adjusted earnings per share of $1.10. To put that in perspective, 2024 was the company’s first profitable fiscal year, reporting $0.79 a share in adjusted EPS for the full year , Put differently, DoorDash is a young, fast-growing business that has only recently turned the corner to profitability, which accounts for the very high multiples and the remarkable price appreciation. Recent performance notwithstanding, the company is moderating growth in core segments and facing competitive pressures. Even solid operating results could see muted post-earnings price appreciation, given the sharp upside moves it has already seen. First-quarter revenue missed estimates, despite beating earnings per share, as food delivery growth slowed to 13% year-over-year. Projections for 2025 assume aggressive expansion, but bear scenarios forecast revenue compound annual growth rates of 25%, an enviable growth rate for a mature business, certainly, but there are other companies — in unrelated businesses, admittedly — that are growing more quickly and trading at much lower multiples, such as Nvidia. The trade Currently, the options market is estimating a post-earnings move of approximately 8.5%, which is above the average during the company’s history since the IPO and substantially higher than the average move of 5.2% over the past four quarterly earnings releases. One way to take advantage of elevated options premia is to sell straddles or strangles — selling both a call and a put in instances where an investor believes that a stock’s price move over a specific time horizon is unlikely to be as large as that implied by the options prices. While this can be a good strategy, it comes with the downside of taking considerable risk if one underestimates the potential move. For example, if one sold the August 29th expiration 225/285 strangle at Friday’s closing prices (below), one would collect nearly 3.7% of the current stock price in just under five weeks, more than 39% annualized—a very nice rate of return. However, if DASH were to move substantially, the strangle seller would face the risk of getting short the stock at just over $294 per share (the short call strike plus the more than $9 in premium collected) or long the stock at just under $216 per share (the short put strike less the premium collected). Buying a slightly further out of the money, longer dated strangle, such as the November 220/290 defines and limits the risk while offering a similar payout profile, bearing in mind the future value of the November strangle as/of August 29th expiration can only be estimated as it will still have more than 2 ½ months to go before it expires close to Thanksgiving. That trade – which I generally refer to as a “strangle swap” – would look as follows… DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
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