I was well into my adult life before I ever took advantage of food delivery services.
It’s not that my family never ate carryout. But my parents would always call it in, wait the 15 minutes and then go pick it up. For them, it just didn’t seem logical to pay someone a delivery fee and then a tip so that they didn’t have to leave the house.
Fast forward not that many years later … and I don’t even want to admit how much money I can spend on Uber Eats if I’m feeling particularly lazy.
Or, it doesn’t even have to be that I’m feeling lazy. It can be quite the opposite. I get so busy that taking the time to go to the store or cook just doesn’t make sense.
I don’t even want to get started on how much money I’ve spent on Amazon.com (Nasdaq: AMZN) over the past year. Yes, I started ordering groceries and other essentials when it was too much of a hassle to go to the local store. But now I’m not planning on changing those habits.
And I don’t think I’m going to be alone.
Amazon just announced that it generated $125.5 billion in sales for the fourth quarter of 2020. That’s its largest quarterly revenue ever.
The convenience of getting things delivered directly to your door is a genie that can’t be put back into the bottle. It’s a trend that will just keep expanding. So today, I wanted to take a look at the apps most of us have on our phones and see if we could make money off any of them … instead of the other way around.
First up, let’s look at Uber Technologies, Inc. (NYSE: UBER). The company just announced earlier this week that it would be acquiring alcohol delivery company Drizly. This could be extremely lucrative for Uber since Drizly is set-up and compliant to sell alcohol in most states.
Prior to this, the company had already acquired Postmates to take it out of the competition and expand restaurant offerings.
These announcements have investors hopefull, and shares are up 52% comparing today’s price to this time last year.
Unfortunately, the company still doesn’t make a profit, and revenues have been all over the board the last five quarters. Due to this and other factors, the company currently has a “Sell” rating.
Next up, we have GrubHub Inc. (NYSE: GRUB), which has seen its Weiss Ratings drop steadily since 2018. Revenue has been increasing for the last five quarters, but the company hasn’t made a profit since the third quarter of 2019. So, we’re currently giving it a “Sell” rating.
Last but not least, we have DoorDash, Inc. (NYSE: DASH). This one is currently showing as “Unrated” on the Weiss Ratings website. That’s simply because shares have only been on the market since Dec. 8, 2020.
In just that short time, shares are up a whopping 79%.
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But we’ve seen other IPOs that have been highly anticipated only for share prices to collapse shortly after. Uber, in particular, comes to mind.
While none of these are “Buys” just yet, I’m personally going to add all three of these convenience players to my watchlist. I’m sure that the trend isn’t going anywhere.
Determining the winner of this race will come down to one key success: Which company can increase earnings without increasing debt at the same rate.
That will trigger a move in the Weiss Investment Ratings ... and then we’ll know that it’s finally time to jump in on these plays.
I know I’ll be paying attention.
Best,
Kelly Green
