Critical Comparison: DoorDash (NASDAQ:DASH) and Dropbox (NASDAQ:DBX)

Dropbox (NASDAQ:DBX) and DoorDash (NASDAQ:DASH) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

94.8% of Dropbox shares are held by institutional investors. Comparatively, 90.6% of DoorDash shares are held by institutional investors. 30.0% of Dropbox shares are held by company insiders. Comparatively, 5.8% of DoorDash shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for Dropbox and DoorDash, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dropbox	1	3	1	0	2.00
DoorDash	0	9	26	1	2.78

Dropbox currently has a consensus price target of $27.50, suggesting a potential upside of 3.85%. DoorDash has a consensus price target of $262.82, suggesting a potential upside of 43.47%. Given DoorDash’s stronger consensus rating and higher possible upside, analysts plainly believe DoorDash is more favorable than Dropbox.

Valuation and Earnings

This table compares Dropbox and DoorDash”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dropbox	$2.52 billion	2.53	$508.40 million	$1.86	14.24
DoorDash	$13.72 billion	5.80	$935.00 million	$2.12	86.41

DoorDash has higher revenue and earnings than Dropbox. Dropbox is trading at a lower price-to-earnings ratio than DoorDash, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Dropbox and DoorDash’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dropbox	20.17%	-37.47%	18.80%
DoorDash	6.82%	10.15%	5.49%

Risk and Volatility

Dropbox has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, DoorDash has a beta of 1.82, meaning that its share price is 82% more volatile than the S&P 500.

Summary

DoorDash beats Dropbox on 11 of the 15 factors compared between the two stocks.

About Dropbox

Dropbox, Inc. provides a content collaboration platform worldwide. The company's platform allows individuals, families, teams, and organizations to collaborate and sign up for free through its website or app, as well as upgrade to a paid subscription plan for premium features. It serves customers in professional services, technology, media, education, industrial, consumer and retail, and financial services industries. The company was formerly known as Evenflow, Inc. and changed its name to Dropbox, Inc. in October 2009. Dropbox, Inc. was incorporated in 2007 and is headquartered in San Francisco, California.

About DoorDash

DoorDash, Inc., together with its subsidiaries, operates a commerce platform that connects merchants, consumers, and independent contractors in the United States and internationally. The company operates DoorDash Marketplace and Wolt Marketplace, which provide various services, such as customer acquisition, demand generation, order fulfillment, merchandising, payment processing, and customer support. It also offers membership products, including DashPass and Wolt+; DoorDash Drive and Wolt Drive, which are white-label delivery fulfillment services that enable merchants that have generated consumer demand through their channels to fulfill demand using its platform; DoorDash Storefront that enables merchants to offer consumers on-demand access to e-commerce; and Bbot, which offers merchants digital ordering and payment solutions for in-store and online channels. In addition, the company enables merchants to advertise and promote on its platform to acquire consumers. The company was formerly known as Palo Alto Delivery Inc. and changed its name to DoorDash, Inc. in 2015. DoorDash, Inc. was founded in 2013 and is headquartered in San Francisco, California.