Are Delivery Firm Stocks Overvalued? They Deliver Great Food, but Not Profits

A look at how unprofitable firms are valued

Stephen Foerster
Published in
8 min readNov 29, 2021


Photo by eggbank on Unsplash

Q. What’s worth almost half a trillion dollars and had operating losses of over 12 billion dollars last year?

A. Nine publicly-traded delivery firms, including Uber and DoorDash.

Are investors in delivery firm stocks partying like it’s 1999, just before the dot-com bubble burst? Or are these stocks fairly priced? I’ll review the evidence including the revenues these firms are generating, the losses that they are incurring, the expected growth in revenues, and their values relative to their revenues, compared with some well-known growth stocks. I’ll also examine the challenges of valuing stocks that aren’t profitable.

Public Delivery Firms
Here’s a brief business description of each of the nine firms according to S&P Capital IQ (and the primary country in which each operates), listed in order from the smallest market capitalization to the largest:

  • Deliveroo (UK): Operates an online food delivery platform
  • Just Eat Takeaway (Netherlands): Operates an online food delivery marketplace
  • Lyft (US): Operates a peer-to-peer marketplace for on-demand ridesharing
  • Zomato (India): Operates as an online food delivery company
  • Delivery Hero (Germany): Offers online food ordering and delivery services
  • DiDi Global (China): A mobility technology platform, provides ride-hailing and other services
  • DoorDash (US): Operates a logistics platform that connects merchants, consumers, and dashers
  • Uber Technologies (US): Develops and operates proprietary technology applications
  • Meituan (China): An investment holding company, provides an e-commerce platform that uses technology to connect consumers and merchants

Uber, Lyft, and Didi primarily offer ride-hailing services, but food delivery as well. UberEats represents about half of Uber’s overall revenue. As the first chart shows, the market caps (as of November 2021) range from $7.5 billion (Deliveroo) to $215 billion (Meituan), and collectively $488…



Stephen Foerster

I’m a Finance prof, CFA, and author of In Pursuit of the Perfect Portfolio (with Andrew Lo). I write stories about investing. (I don’t give financial advice.)