# Pershing Square Challenge 2026 winners on DoorDash $DASH Yet Another Value Podcast · 2026-05-22 · 57 min · https://www.youtube.com/watch?v=_I99r_GKhyg ## Transcript Andrew Walker Today, we have the Pershing Square Challenge. It happens every year at Columbia Business School: students get together and pitch a stock, and at the end there is a winning team. Today, we have the winning team—Team DoorDash. These are students between their first and second years of business school. 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 different primary research people. I told them they should have rounded it to 100, but they talked to 90 people. I particularly wish I had hit harder on the international work. I had multiple people reach out and say this was proprietary research they did to prove the value of some international acquisitions, and people were just blown away by it. They did awesome work. You can see a link to their research in the show notes. If you're interested in reading that or reaching out to any of them, I'd highly encourage you to do it. I'd also encourage you to listen to the whole podcast because there's a surprise appearance from both of my daughters. I'm recording this from New Orleans, and if you listen all the way in on YouTube, you'll get a quick view of the two cutest girls in the entire world. This podcast is sponsored by TRDA—trytra.com. I think they're just trodden.com at this point now. It's trata.com. Look, TRDA is two buyers getting together and discussing a stock that one of them is skeptical on, one of them owns, one of them shorts, whatever it is. It's two buyers getting together. I just find them fantastic for when you see a company and want to know the problems that a company's facing, because the 10-K doesn't always talk about those problems. 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 the ongoing implosion being caused by AI. But if you go read a TRDA transcript, you're going to have somebody who's long the stock saying, "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 short saying, "I talked to 20 people and 8 of them are canceling their subscription when it comes up because they can replace it with homegrown AI tools." Not only that, but TRDA has a DoorDash transcript on there, which I referenced during the podcast and used to prepare for this podcast. So if you go to troda.com and I'll include a link in the show notes there as well, you're going to find that transcript. It's a great product for researching and getting up to speed. If you're looking at a company and want to go long or short, you can get a TRDA call going and talk to somebody knowledgeable to stress-test your case. Go to troda.com to check it out. And thank you to Tora for sponsoring this podcast. With me today, I'm happy to have—I'm going to call them Team DoorDash from the Pershing Square Challenge. Team DoorDash, you guys were the winners of the Pershing Square Challenge, so congratulations. Disclaimer to 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. We'll include a link to your thesis and everything in the show notes so people can see the presentation or whatever it is. We'll dive into DoorDash in a second, but to start, I'd love it if you guys could introduce yourselves so people know who you are and where you're coming from. ZK, maybe we'll start with you. ZK Hey, everybody. I go by ZK. I was born and raised in China. I did my undergraduate degree in the U.S. I went back to China and worked in the renewable industry for 5 years. At the time, in my free time, I started reading about investing and got really excited about it. So, I decided to pivot into the investment management industry and do this MBA at Columbia, which is my dream school. I'm still exploring summer options at this point. Feel free to email me if you're interested. Andrew Walker That's awesome. I think winning the Pershing Square Challenge comes with a prize pool, which probably is nice for the summer opportunity, but I know they're in high demand. Elliot Absolutely. And thank you, Andrew, for having us. I'm Elliot Tris. I'm currently an MBA intern at Alpine Capital Research. I'm a first-year MBA student going into my second year at Columbia. Before business school, I was a buy-side equity research analyst at a long-only firm with roughly $9 billion of assets under management, and I did fundamental equity research there. I'm really looking forward to discussing DoorDash and our idea. Andrew Walker Cool. Elliot, I know you were just in New Orleans. Do you want to go next, just because New Orleans is on top of mind? Aaron I'm Aaron Samuels. Like Elliot and ZK, I just finished my first year at Columbia's MBA program. Before business school, I started my career at a family office and was there for a year and a half. Then I spent over 3 years on the sell side covering internet and software. This summer, I'm interning at a couple of asset management firms. Andrew Walker I heard at least 2 of the 3 of you have backgrounds on the buy side and in 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 handicap and ding you. Let's turn to the winning pitch. You guys chose DoorDash. I'd love to dive into the fundamentals and everything, but whoever wants to take this, I'd love to start with just what made you guys choose DoorDash? There are 3,000 U.S.-listed, publicly traded stocks. I think you could do international stocks as well. What made you focus on DoorDash as the stock you wanted to pitch? Andrew Walker Aaron, do you want to go ahead? Aaron Sure. We looked at a bunch of names. Our process, between when the class started and we teamed up and when we first submitted DoorDash as a ticker, was either 2 or 3 weeks. In those 2 or 3 weeks, we looked at a few dozen names that we kicked around with various levels of focus. Some names got 10 minutes before somebody vetoed them. There were 3 or 4 companies that we all looked at fairly deeply, and we were screening for a handful of things. We wanted a company that would be easy to stand in front of a judge of 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 explaining a complex business model. We were thinking about risk-reward asymmetry: if everything goes right, how much money do you make? If everything goes wrong, how much can you lose? And then, given the stock pitch competition, we'd have 3 months to look at these names. We wanted something where we thought we could do a lot of research on the key issues that actually matter to the stock. For DoorDash, 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 could do to get at the key issues around each of those segments and what really drives the model. We thought, okay, well, there are a lot of channel checks we could do. We could do a survey. We could try to scrape some data from DoorDash's app. This was a good one. Elliot and ZK, jump in if I missed anything. Elliot I think that's how I would describe our process in choosing DoorDash. We turned over a lot of stones at 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 buy side previously, I used this as an opportunity to say, "This idea looks really interesting, and I haven't done any work on it. What do you think? What do you guys think of this?" We did a lot of that stuff at the very beginning. Andrew Walker Look, I just want to say, regarding what Aaron said—and obviously this was the whole team's process—but it's no surprise you won. I have a lot of people with pitches, or when they're doing buy-side interviews, they'll come to me and have a write-up. 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 a PhD 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 science.” You’re going to be pitching to mouth jewelers like me who haven’t taken a science class since senior year of high school. Your research might be great, but they can’t understand it. Or you’ve got this complicated roll-up story in a really niche industry. You guys chose something that everyone understands, right? Not only does everyone understand it, everyone probably uses it. Everyone understands, as you said, the asymmetry. You can build it. And the other thing—and we’ll discuss this in a second—is that you can do a lot of primary research on this thing. Maybe you guys think this is trading at 100 and it’s worth 400, but even if you found something that was trading at 100 and worth 1,000, this is just a better pitch. It’s a better stock story. I apologize—not just for the work and stuff, but you kind of knew the game you were playing. I think that’s super helpful. ZK, did you have anything you wanted to add there, or should we dive into DoorDash? ZK Nothing to add. I’ll just double-click on what Elliot said. It wasn’t boring for us. It was actually very interesting for us to flip through all the slides, and that’s all. Andrew Walker It was interesting. At the time, it was probably pretty bothersome. All right, so let’s go to DoorDash. I’m sure most listeners are probably listening on an iPhone or another phone, and I’m sure they know what DoorDash is. But let’s talk about what DoorDash is and why they’re so interesting. Aaron DoorDash is the largest U.S. restaurant player. To Aaron’s point, I think we didn’t have to spend any time on the company overview. Why did we think it was interesting? We have 3 reasons why we think it’s good to own Dash right now. First is that we think U.S. restaurant growth is more durable than the Street thinks. Second, we think that new verticals and international will reach profitability earlier than the Street thinks. Lastly, we believe there’s an underappreciated margin expansion from opex leverage that the Street also doesn’t appreciate. Those are the 3 things that lead us to believe it’s misunderstood, and that’s why it’s interesting. Andrew Walker Perfect. Those are 3 things I’ve got notes on, so we can start diving into all of them. You laid out 3 things there. It’s hard to boil it down to 1, but what do you think is the 1 key insight that you guys have versus the market that makes this a risk-adjusted alpha opportunity? Aaron 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—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 did a lot of work on the user base and frequency, 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 5 years from now? How many times a month are those active users ordering, and where could that ceiling be? Thinking about that, it’s probably the biggest driver in terms of the delta to our numbers versus consensus, just because U.S. restaurants are the biggest part of the business. Andrew Walker All right, let’s dive into that, then. I thought that was really interesting, and I believe you guys did a thorough call and prep for this that I’ll reference a few times because I thought that was interesting. You talked about how it’s not just the user base. As the U.S. ages, you think about a 75-year-old 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 is actually taking a user who—I mean, my parents DoorDash a pretty good bit. I’m recording this from New Orleans, and I’ve been surprised how much we’re DoorDashing. But a 75-year-old in general is going to DoorDash less than a 22-year-old. Can you talk about those dynamics? Then I do have another thought on the restaurant dynamics I’d love to take. Aaron On the user-base side, we’d always be skeptical if a company said, “The population is growing, so that’s a good thing for our business.” But for DoorDash, we actually think those demographics in the U.S. are a pretty big tailwind. Every year, about 4 million people in the U.S. are turning 18. They might be graduating college or high school and getting their first disposable income, or joining the full-time workforce. It’s about 4 million a year. That Gen Z cohort has grown up in an on-demand world, in terms of the third-party data that we’ve seen. Then, of course, anecdotally, we think that a 20-year-old is much more likely to think, “Oh, I’m hungry. Let me check my phone,” versus somebody who’s 70 or 80. So that’s 4 million people a year. In our model, I think about 40% of the North American growth each year is coming from demographic trends. We also saw some data that showed younger people—specifically, I think it was 18 to 30—are more likely to be using DoorDash than Uber Eats or Grubhub. DoorDash is already the market leader, but within the younger demographics, DoorDash has even slightly higher penetration. Andrew Walker Why do you think younger people are using DoorDash more than Uber Eats or Grubhub? Aaron I think they understand that it’s a better product. This is also just me speculating. We didn’t do a lot of work to understand why that is, but when we look at DoorDash from every angle that you slice the product, it’s better. Delivery times are faster, fees are lower, merchant selection is better, and customer satisfaction on surveys is higher. Older folks 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 Eats as well,” or they might prefer that integrated experience. Whereas younger people maybe are just a little 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, ZK or Elliot, please let me know. ZK I just want to emphasize that we did so much work to compare the product quality with Uber and Grubhub in the U.S. It’s just very clear across everything that management has been maniacal about making this product amazing. That’s where the evidence points us. Andrew Walker It’s funny you say that because I’m in New York City, and I’ve been there for 15-plus years. I was a longtime Seamless user. Then DoorDash—I think I got a free DashPass membership through my Lyft partnership or Chase Sapphire. We’ll talk about that in a second, but basically, I only use DoorDash now. I wasn’t sure when I made the switch or why, but as you say, the DoorDash product is just simpler. It’s cleaner. The Seamless product is kind of clunky. With Uber Eats, I’ve got to click through it on Uber or go through Uber Eats. When I read this in your deck, I was a little skeptical, but as you all laid it out, it was kind of like, well, reveal preferences. I’ve lived this and made the choice with my own wallet that I order DoorDash a lot more than I would want to admit on the podcast. ZK, anything to add there, or should I keep going to the next point? ZK Yeah, nothing to add. Andrew Walker I do hear you. Let’s go back to the restaurant-growth story. As Aaron said, and as you guys have supported, the story is that the Street—and I think they’ve been saying this for the past 2 to 3 years—thinks restaurant growth has tapped out. You guys are saying there’s a longer runway. I do hear you on the demographic trends, but ultimately, if you think about replacing 4 million 75-year-olds with 4 million 23-year-olds who are more likely to order every day, every year, that’s nice, but that tailwind is kind of low-single-digit growth, right? Then you get GDP plus. So you’re talking about mid-single-digit growth, if I’m doing that in my head, right? You need increased penetration and, really, increased ordering frequency to drive this. I think you guys see that, and I think the past years have borne that out. But I would push back on that and say, COVID is when I ordered the most and had the most stuff delivered. If we’re past COVID, we’re already in the DoorDash world. It is one of those things—on Instagram, you can always take 30 more minutes and stay up late at night. There are 3 meals a day—maybe 2 meals in a GLP-1 world, I don’t know. But how much more room is there really for penetration and for people to order through DoorDash? Aaron On the frequency side, that’s a big piece of the puzzle. For U.S. restaurants, we estimate that in 2025, the average monthly active user was ordering roughly 5 times a month, and we’re modeling that kicking up to 6. We got to that number a couple of different ways. We spoke to a lot of people in the industry, talked about the trends they were seeing, and asked 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 in frequency is only 3% a year, which we think is reasonable. We also looked at Meituan and China, and we saw that their monthly active users are ordering 8 or 9 times a month. Of course, delivery fees are lower, but the fact that China’s at 8 or 9 today and we’re modeling the U.S. getting to 6 over the next 4 years seems reasonable to us. The big growth driver really is new users. So, on the frequency side, we’re modeling 3% CAGR; on the monthly active user side, we’re modeling 8% CAGR. That’s coming from a combination of the demographic dynamic, like we talked about. I was just pulling up the numbers: it was about 45% of the monthly active growth that we’re modeling. The rest is coming from share gains relative to Uber Eats and other competitors. And then also the dynamic where, in the U.S. today, there are a lot of people who are ordering 3, 4, or 5 times a year. So if you’re ordering 4 times a year, you’re only included in the monthly active user count 33% of the time. Well, if that person kicks up their order frequency over the 4- or 5-year period, they’ll show up in monthly active more. So those are the 3 buckets that we thought about user growth in, and that really is the big driver. And then order value, we’re modeling that as ticking up actually a little bit slower than forecasted inflation, just because you’ve seen basket sizes remain pretty stable over the past 2 years. Andrew Walker ZK, did you want to add anything there? ZK I think that’s reasonable. Andrew Walker Okay, I want to turn—I think the other places we talked about were new verticals and international, and I want to talk about them both. I think, particularly in international, it was the most interesting piece of primary research you did here. But let me turn to something completely different. You mentioned that they have better products, and I can’t qualitatively prove that or quantitatively prove that, but obviously my experience, as I talked about, says that. But if I’m just looking—if I’m, and I am looking at this company—it’s about a $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 $1 billion in stock comp in 2025. I think in 2026 they’re going to do $1.3 billion. They’re doing a whole system remodel, but there’s $1 billion of LTM capex and $1.3 billion of capitalized software. So if I just add those numbers up, I think somebody who does stuff on GAAP accounting would look at this and say, “Well, this is at best break-even and at worst slightly negative.” Yes, you’re going to grow nicely, and yes, you’re probably going to get some operating leverage, but you’re starting from $70 billion on non-GAAP numbers. You’re at 25 to 30 times EBITDA. Obviously, there are taxes and everything on GAAP numbers; you’re at infinite. I think people would push back and start to say, “Hey, this is already 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.” So how would you respond to somebody who was talking about valuation there? Aaron 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 sort of 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 about valuation. So our target multiple at 10 times leads us to a roughly $320 price target in 2029. But we weren’t comfortable there. We looked at price-to-free-cash-flow. We think, at the end of the day, free cash flow—or cash flow—is king. But we also think that stock-based comp, because this is a stock-based-comp-heavy business, is a real expense. So we took free cash flow minus stock-based compensation, and at 10 times our EBITDA, that kind of implies an 18 times free cash flow multiple. So that’s where we got comfortable with the valuation. These are our terminal multiples. We kind of thought, “Okay, how much is this business going to earn in the future, and what’s a reasonable valuation over time?” Andrew Walker Dude, I mean, look, 18 times free cash flow on a terminal multiple, and it sounds like you addressed it for stock comp and everything—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 would kind of want to seed the floor. Elliot Well, I would just jump in and add that, for the purposes of these stock pitch competitions, what you usually see is people look at a company and put a 3- or 4-year price target on it. We did have the benefit of looking further out. Our valuation is based on our 2030 forecasts. This is a company that’s going to be compounding EBITDA at over 30%, we believe, for the next 4 years. That certainly helps, and that’s what got us comfortable with choosing DoorDash and underwriting it. If we were to make this investment and then not look at it for 3 years, we think this is going to be a much bigger and more profitable business. Of course, we did analysis around the downside: What if we’re wrong, and it stops growing and there’s no margin expansion? For sure, in that case, you’re not going to make money. But we do think that the risk-reward is good. I just wanted to address that, too, on the valuation piece. Andrew Walker Perfect. Let’s talk about the downside. So you laid out a downside where it stops growing and there’s 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 that you do have competitors, right? There’s Seamless. There’s Seamless/Grubhub—I don’t even know who owns that anymore. But there’s Uber Eats, Instacart, and we’ll talk about new verticals in a second. DoorDash is going into groceries; Instacart’s going into delivery. And the one I really think about is, look, my membership, as I mentioned earlier, comes through either Chase Sapphire or Lyft. I got the DoorDash membership. Amazon has Amazon Prime, and I know I get a Seamless membership. So I’m sure that’s Seamless/Grubhub. I know I get that through Amazon. I do wonder if this is kind of a bundled product long term. And I keep thinking about Amazon. A couple months ago, they came out and said, “Hey, we’re going to open up our logistics network and we’re going to let people use it for shipping,” and all the trucking companies got crushed, especially all the less-than-truckload companies. I do wonder if a year from now you open this up and Amazon says, “Hey, you can use our app not just to order groceries from Whole Foods, but we’re going to use our logistics to deliver from other grocery stores.” That seems a little niche, but what happens if you wake up to a press release and Amazon has bought Seamless/Grubhub, and now they’re rolling it out and they’re going to use all those little guys on Citi Bikes who will also stop at a restaurant and deliver food? I keep wondering what happens if that happens in a decently competitive space that DoorDash seems to be dominating. What happens if Uber Eats goes to Chase and says, “Hey, you guys have the Lyft-DoorDash partnership. We want to take that away from you”? You wake up and all those Chase Sapphire members like me—it’s easier for us to just use the Uber Eats app. How do you guys think about the competition along those lines? I know I laid out a lot of different competitive scenarios, but I’ll let you guys take it from wherever you want. Elliot Yeah, I can start there. On Amazon, Amazon is this huge GMV player, and DoorDash is at—we think they get to roughly $130 billion in GMV—just a niche for Amazon. We had an expert call with a relatively high-up Amazon executive, and it kind of felt like Amazon—or DoorDash—is too small of a player for Amazon to really be super concerned about. They’re focused on the big, sort of Walmart-type competitor. ZK I can add on top of Elliot. And we talked to some senior partners at Instacart, and basically, he said that grocery delivery is a growing and big market. He expects all the players in this space to do well over the next 3 years, and we will definitely keep monitoring that competitive landscape going forward. But based on the current evidence, we think competition is not the headline concern there. Andrew Walker Let me pivot into something completely separate. You guys did—and again, we'll talk about international, where I think you guys have the coolest work, in a second—but you guys did a lot of primary research here. One of the things I tell people when they're either applying for jobs or doing these comps is that you want something that grabs people's attention. The way you do that is not with an NPV, IRR, and DCF: “Hey, you know, I bribed the CEO, and here's what the quarterly earnings...” It's something that you can't find in the 10-K. I think you guys did approaching 100 primary research calls here that really jumps off the page. I just want to ask—and anyone can start on this—can you talk about the primary research you did, what you learned from it, where you focused, and how you built that into your presentation? Aaron Sure. So, to your point, we did a bit under 100 calls. Andrew Walker Did you say “under”? Did you just say “under”? Aaron, you’ve got to round it up to 100, man. Aaron I think we did 90. I feel like that's fair for me, too, Andrew, to round. But anyway, we understood just how valuable these would be to really get under the hood of the business and get at the key issues. We focused on former DoorDash employees, current and former employees at all of their competitors. We spoke with a bunch of merchants, which was really invaluable to understand how they think about DoorDash versus Uber Eats, and to understand commissions and how the salespeople interact with them. We also did—we counted this in 90—calls with a few investors that own Dash, or professional investors, and a couple of sell-side analysts as well that cover it. Elliot And that has informed a lot of things in our model. There are a few examples that we'd be happy to walk through, but probably some of the best—and ZK mentioned that we did a few calls on the grocery side specifically, which is DoorDash's new verticals bucket. There’s some third-party data that we got access to that talked about what grocery basket sizes are. The unit economics for a grocery order are different than a typical restaurant food-delivery order because the Dasher needs to walk through the grocery store and pick things off the shelves. So they need to get compensated for their time. The grocery commission rate is lower than what a restaurant pays. If you order from a restaurant through the DoorDash app, DoorDash gets to keep over 20% of the subtotal. It's less than half of that for a grocery order. So, all of that's to say, you need a much higher basket size to make the math work in terms of getting grocery, or new verticals, profitable. We started with the question: How high do we think AOV—average order value—is going to get on the grocery side? We did calls with people in the grocery space, including current and former Instacart employees, and we got a sense of how they grew their basket sizes over time. We asked them about what they were seeing from DoorDash. Based on the third-party data, our understanding is that average order sizes, or basket sizes, were in the 30s 3 years ago, and now they're approaching a little bit north of 50. How did they do that, and are they going to continue growing it? That's one example, and that totally impacts our model. It impacts the timing of when the new verticals segment—or at least, as we define it—becomes profitable. The calls really informed the forecasts in our model, and in terms of orders and even on the monthly active-user side, some of the tidbits that we got from these calls impacted the KPIs that really drive the model and the upside that we're modeling. Andrew Walker Great. You mentioned grocery a few times there, so let me just go to that. 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 the stock. Again, I was reading that Tegus call I mentioned, and he hit on something that had been tearing at the back of my mind. The restaurant-delivery business is a really good business. You think about it, and you really need the old Booking.com thing: Why is Booking in the U.S. not as good as Booking in Europe? In the U.S., there are 6 hotel chains that were really dominant, whereas in Europe it's a lot of small properties. So you have to go get thousands of hotels on your platform. Restaurants are similar, right? If you have 1 Thai restaurant and 1 burger restaurant, that's not enough. 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. I think you guys mentioned 5 times per month. I'm a little bit above that, but higher order frequencies mean the person has an ingrained habit where they're used to opening the same app and ordering. They've got their favorite. If you're going into grocery, 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 actually a shopper walking through, so there's a bigger service fee. It's either going to get charged by DoorDash or baked into the price. I think I push back: If you're paying a DoorDasher for an hour of their time, that's an hour of their time that's yours—but we could talk about that later. It's a harder business, it's lower margin, and there are only going to be 3 to 5 grocery stores that matter, so it's very competitive. Anyway, what the TRA call was saying was, hey, you're moving from this great business, and every vertical that you tack on adds to the TAM, but it's a worse business. What would you guys think about that conjecture, as I'm pushing back on new verticals as a value driver or a growth adder? Elliot I think that's true. I think it is a worse business, but it has a massive TAM, and DoorDash can approach it. They're very focused on payback periods and making sure that the rate of return they're getting on these investments exceeds their cost of capital. DoorDash is maniacal, at least in 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 to hit these KPIs by the end of the year. If they don't hit it, that product will either be deemphasized, 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. 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 probably aren't going to be what the return on capital was when DoorDash was investing in U.S. restaurants in the early days. One other piece there: We've seen DoorDash pretty publicly exit some markets. There were full markets that they exited internationally earlier this year. We view it as a good thing. It shows that management is disciplined; they're not growing hand over fist and ignoring the path to profitability. If there's a market, product, or new vertical where they're not going to be successful, management will walk away. We view that as a pretty good thing. And also, to add to that, we see them in new verticals as losing $1.5 billion right now. In our period of getting to that $320 price target, we agree with you, Andrew, that it's not as good of a business. We're saying it inflects to profitability in our terminal year, in that 3-year period to get to that $320. There's this kind of profit hole. Management is maniacal about everything getting efficient and profitable. We think that happens over time, but we don't necessarily see the profit improvement—to get to that $320—as this crazy thing where it's gushing cash in 2030 or something. Andrew Walker And you mentioned management a lot. I've heard somewhere, right? You guys have a slide in your deck that says—it’s got a great quote from a sell-side analyst, I believe you talked to—that says, hey, outside of maybe Jeff Bezos and Tobi, the guy at Shopify, Tony, the CEO and founder of DoorDash, is the best CEO. Like, killer, A-plus. I've heard absolute similar things. If you read somebody's bull pitch on DoorDash, often the first line is “Tony, Tony, Tony.” I want to ask you guys: Obviously, you like the economics, you like the business, and you think there's a lot of growth. They're going to win in categories. How much is this a DoorDash bet versus a Berkshire Hathaway bet? There are people who love the railroad business, who think the insurance business is advantaged, but Berkshire Hathaway—until today, because Buffett's gone—was a Buffett bet. So how much is this a DoorDash bet versus a Tony bet? Elliot I think all of this was made by Tony and the senior management team. So I think, to some level, Tony created this, and the management team created this opportunity, going back to 2013, starting this at Stanford GSB. The opportunity is there because they created it. So we do believe in the narrative and the economic prospects of the business, but I think it's a huge part of what we're, quote-unquote, betting on. Andrew Walker Do you all—Aaron and ZK—agree with that? Aaron Yeah, I do. And just to maybe state it differently, Tony has created a culture of operational excellence. We spoke to, as I mentioned, a lot of employees at DoorDash, a lot of former 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, is really noticeable. We did a call with somebody who had been at DoorDash for 3 years and then a call with somebody who was currently at Uber. She had been there for 3 or 4 years, at similar levels, in her late 20s, so it was her first or second job out of college. These were back-to-back calls, and it just stood out. The Uber person could explain what they did and 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, and 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 those product advantages. We would be definitely disappointed if Tony left. That would probably not be great for the business, but we do think that he's 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. Andrew Walker You know, again, it's just funny. Uber—I don't think anyone would ever accuse Uber of not having a lot of brainpower, or the apps or the company not being data-driven, all this sort of stuff. But, again, this is just my revealed preference: the DoorDash app, when I open it, is just easier to use. I did it unknowingly, but I started using it, and that is a credit to the team, the founder, and all that sort of stuff. There is one other funny thing. Tony gets paid—I'm looking at it—Tony is 41. So if you're betting on the horse, it's kind of nice. You've probably got—I mean, who knows what the future is, but you've probably got 30 more years of Tony running this, assuming some people do like to retire when they're in their mid-50s and they're billionaires. The other funny thing is, I'm looking at the proxy, he makes $400,000 per year, right? All in, $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 $14 million, he's probably going to make $30–$40 million in stock comp. So you'd actually have to add in $30–$40 million. And it's just a funny thing to think about. It doesn't really swing it one way or another, but anything else you guys want to add on Tony? I do want to make sure I hit international before we kind of wrap this up. ZK I just want to add on the compensation. You said the other executives are earning low-teens-million compensation over there. I just want to point out that, excluding the CEO, the average target compensation consists of 4% cash-based salary and 96% equity. So they're well aligned with shareholders. Andrew Walker It's a great point. 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. I don't know if it's options or PSUs or what it is, but whatever it is, these are—we are getting the stock to go up, and everyone is aligning. 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. My least favorite thing is companies that aren't eating their own cooking. I've been doing the Stock Card series, and there are 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 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 sad. Let's go to international. DoorDash has done some international acquisitions recently, and I want to talk about the international opportunity. But I also want to make sure I talk about one of the acquisitions. Was it Wolt or Wolt? It's Wolt. I don't know if it's Wolt or Wolt. Speaker 4 It's Wolt. Andrew Walker Okay. But you guys did great work on 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, the margins, and everything there. So I want to make sure we hit that, but whoever wants to start can take it. What about the international opportunity for DoorDash? ZK I can start with it, and Aaron and Elliot can add on to what I talked about. So DoorDash basically acquired Wolt back in 2022, and we did a proprietary case study on that. We used a mix of third-party data and our own primary research to analyze the post-acquisition market-share gains with Wolt, and the data shows that, in all the markets we've researched, Wolt has gained significant market share. An interesting aspect about it is we actually found out that, in Denmark, international conglomerates have to disclose their Denmark subsidiaries. So we know how Wolt has been doing better in Denmark, and on top of that, we used third-party data. So it gets to the conclusion that Wolt has been doing really well post-acquisition, and that was also confirmed by talking with former and current Wolt employees, one of whom is a DoorDash employee. We also talked to a Deliveroo employee about the potential execution risks—what are the challenges they're facing? And in our research, we believe DoorDash can solve all of them. One Deliveroo employee talked to us and said, “Uber Eats is just subsidizing all the restaurants they've signed exclusive deals with, with all the money, but they cannot fight back.” With DoorDash, which can provide ample capital to Deliveroo, I think that challenge will be mitigated. Aaron and Elliot, feel free to add on. Elliot No, I think that was great. The key point that we're making is DoorDash has done a really nice job of integrating and running Wolt. Now they've put capital to work with Deliveroo, and we trust that there's a playbook there: they know how to acquire a business, integrate it, and run it. All of the operational excellence that we've been talking about for U.S. restaurants, they'll find ways to apply it to these new markets that they're entering inorganically. Andrew Walker Look, I feel silly saying it at the end because, again, I read it and I was like, “This is a really good case study.” I don't follow DoorDash super closely, but you see it in the Tegus call, and I heard it from several other people. They're like, “This Wolt analysis is really proprietary and really interesting.” So that's awesome. Internationally, I do want to mention one other thing. Tony talks about it: “Hey, we bought Deliveroo. We could have just 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 redoing 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 AI. Do you guys just want to talk about that? I don't even know what there is to talk about, but I think 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 understating what the actual earnings are. But wherever you guys want to go, I'd love that. And then I have 1 last question before we kind of wrap this. Speaker 5 Yeah, to your point, DoorDash— Andrew Walker Go ahead. Elliot DoorDash is in the middle of a pretty big reinvestment cycle. Right now, you have the DoorDash app, the Wolt app, and the Deliveroo app running on 3 different tech stacks. What they're doing is integrating them and bringing them onto 1 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–$400 million in R&D and other expenses to do this. We view this as a really good thing to create long-term intrinsic value. The simple example is, to ship a feature onto all 3 apps right now, there are 3 teams of engineers—probably 1 in San Francisco, 1 in London, and 1 in Finland—that need to go ahead and do that. A year from now, there will be 1 team of engineers that could do that to all 3 apps, and they think that's going to drive pretty significant leverage. But this reinvestment cycle is a huge part of why the stock is down so much from the peak. DoorDash talked about these stepped-up investments at 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. Elliot You're seeing incremental margins lower this year than last year, which certainly scares investors. But if you look through the one-time nature of these expenses, we think it's going to really help them drive significant leverage in the coming years. We view it as a positive, talking about betting on the jockey in Tony Xu. There's no CEO we'd rather make this kind of big tech investment with, 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. Andrew Walker Really well said, Elliot. Did you want to add anything there? Aaron Yeah, I think that was really well said too, Elliot. I guess the only other thing I think of is: Why are we so ahead of the Street? Yes, we're meaningfully ahead of the Street with all the other stuff that we talked about, but since that November release of the tech integration of the tech stack, EBITDA in 2027 and 2028 is down 11–12% and has not rebased. And in 2028, 2029, and 2030, we're like 16–17% above the Street. So, yeah, you can see we're bullish, but the Street's terminalizing this as a big expense and is kind of dragging their numbers through on their spreadsheets. That gets us just that much more variance. Andrew Walker That's great. Let me ask the last question I want to ask, and it's funny because the Q1 call basically becomes a rebuttal. Oh, look, my daughter decided to join the podcast. Hi, Sylvie. Do you want to say hello to everyone? Say hi. Sylvie Hi. Andrew Walker All right. Both of my daughters are here. Sylvie Come on. Andrew Walker Bye, guys. Have fun at the aquarium. Sorry about that. Last question. Citrini publishes a piece at the end of January, early February, that says AI is going to eat everything, right? DoorDash is actually prominently mentioned, and they say, “Hey, your AI agent—you'll just go tell it, ‘I want Thai food,’ and it'll go find the cheapest way to get the Thai food delivered.” The company spends a lot of its Q1 call talking about why Citrini is wrong. Ultimately, I'll reveal my bias: I probably think they're wrong. But at the same time, when I was ordering DoorDash, we got a pizza—my daughter was in the room. We got a pizza because she loves pizza the other night. I go on DoorDash, and the pizza is $30 on DoorDash. 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 and call them up or order through the restaurant website. Honestly, I almost still ordered from DoorDash because it's a lot more convenient to order from DoorDash. But I was thinking, when I saw this and was presented with this choice, 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 thesis that AI agents are going to run everything and replace DoorDash. Whoever wants to start can talk. I can start, or go ahead, Elliot. Elliot Okay. So our view is that a three-sided network is super powerful and is more than just a delivery app. Building a local three-sided network requires significant acquisition costs for couriers, merchants, and consumers. The barrier to entry isn't actually the software; it's the actual network effects. This is a three-sided network. We believe that Citrini mistakenly assumes that after driver costs, the delivery fees effectively all flow to profit, and that's just not true. There are so many costs, like driver insurance, payment processing, and infrastructure, that no entrant can really escape. We believe there are a lot of things that are wrong about the Citrini research report. Andrew Walker So, if I'm just hearing you, it's a three-sided network: consumers on one side, merchants on the other, and dashers who are actually delivering the products. On your last, Elliot, it feels to me like what you're saying is it's actually the dasher side of the network, because I go to the AI and say, “Go find me Pad Thai near me.” It can Google that or it can find that. Obviously, consumers are going to the AI, but it's the dasher side—getting somebody who is actively available to go pick that up and deliver it quickly and on time. All of this sounds like it's that piece of the network that you think is the toughest for the AI agent. Elliot Kind of. I think there are just so many little things in the physical world that happen that can't just be vibe-coded away. For example, the handoff from the merchant to the courier to the consumer: There are so many little things that go wrong all the time in this business, and DoorDash has done a really good job of executing amazingly well, so it doesn't look like there is a problem. But it is so hard. There are so many little things that are just messy that I think it would be a total mess for something like a vibe-coded app—just vibe-code it up. Andrew Walker And look, hotels—I have thought booking might be susceptible. But with hotels, you just need the hotel; it's $250 a night versus getting a burger delivered for $12.50, 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? ZK I just want to touch on this potential shift of the top of the funnel. I think management really double-clicked on our view. Andrew Walker Yes. ZK In the latest earnings, Google, which has done food delivery since 2013 and put more emphasis on that during COVID, shut it down in 2024, citing that they found it was really hard to change customer behavior there. Not only Google, but ByteDance—they tried food delivery back in China, similarly in 2021 and 2022, but didn't prioritize it because of internal resource cannibalization. All the other talent—they don't want to work in a very hard, operationally heavy side of the business, and there's insufficient customer mindshare there. Customers don't say, “Oh, I want to order food. I need to go to TikTok,” something like that. History kind of suggests that when the way customers interact with the internet changes and they want to do something with food delivery, it doesn't succeed. But we'll just keep monitoring that progress going forward. Andrew Walker It's good. I'm laughing at ordering food delivery from TikTok 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 to stop. I'm just saying, hey, congratulations and great work. I mean, I think you did great work, and I think you in particular just aimed for this, and it's no surprise you won. Again, they're first-year, going-on-second-year Columbia MBA students. I'm a little jealous because ZK said it was his dream school. It was his 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, you guys. So, the world's your oyster. Congratulations, guys. We'll talk soon. Have a good one, guys. Thanks, Andrew. A quick disclaimer: nothing on this podcast should be considered 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 adviser. Thanks.