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Top Software Application Stock Searches This Month
Updating 2 Stocks With Huge 81% And 103% YTD Gains
In last Thursday’s Juice, we updated one of our killer 2023 stock picks, Starbucks (SBUX).
While SBUX has done well, it hasn’t done nearly as well as our two biggest stock picks of 2022 into 2023 — Uber (UBER) and DoorDash (DASH). Before we look back — so we can brag a little — and look ahead at each company’s prospects, here’s how amazingly well SBUX, UBER and DASH have done since we suggested taking a look against the S&P 500 and the Nasdaq-100 as measured by the SPDR S&P 500 ETF (SPY) and the Invesco QQQ ETF (QQQ).
Of course, we’ve been recommending SPY and QQQ for a long time so we didn’t fill in those boxes in our little table. But, damn, those are — by and large — some market-beating returns, especially from DASH and UBER.
Speaking of Uber, we first suggested taking a look in early November, 2022. In Time To Take A Ride With Uber?, we said:
Uber reminds us of Amazon back in the day. Soaring revenue (boosted by the post-pandemic return to normal life) alongside significant losses.
For years, AMZN bears chided the company and stayed away from the stock on these irrational fears. They used traditional metrics to judge a company unlike anything we’d seen before.
This stubborn approach didn’t work out well, especially if these people shorted AMZN along the way. Though we bet they didn’t have the balls to bet against Bezos.
Amazon aside, The Juice loves that Uber is (a) diversifying its revenue stream even more and (b) optimally using its treasure trove of rider data.
At just under $27 a share, Uber trades 45% lower than its 52-week high.
It’s the perfect stock to buy a little bit of here and there and add more aggressively on dips.
Because there will be dips, particularly when the company’s detractors freak out over spending and lack of profits. Just like the people who never got Amazon did.
In its most recent Q3, Uber reported:
So, Uber is profitable. And mobility and delivery booking were up 31% and 18%, respectively, year over year.
The Juice listened to Uber’s earnings call from last week and, take it from us, this company is in the early innings. As if rideshare and delivery weren’t enough, its burgeoning advertising business has a ton of room to grow.
From the call:
So we think we’re well on our way to $1 billion plus, which was a target for our ad business that we set a few years ago.
We have full confidence in this. But, beyond the numbers, Uber really is an ecosystem play. We detail that above and in this article where we discussed similarities between the UBER and DASH ecosystems:
We’re completely sober when we say this, but we expect consolidation in the broad delivery and all-things app space. If not consolidation, at least partnership.
As DoorDash builds out DashPass and enters new spaces, Uber is doing likewise via Uber One (its monthly subscription program) and Uber Eats. If it isn’t already, DoorDash’s list of monthly and yearly paying members will look attractive to Uber.
But even if that doesn’t happen, DoorDash is following the Amazon and Uber playbook. Building out an impressive ecosystem to keep consumers loyal.
We still would not be shocked to see an UBER-DASH marriage. It makes sense.
Though, DoorDash is doing just fine by itself. Consider some numbers from its Q3 2023 earnings bonanza, which marked the company’s best quarter since its IPO:
On DASH’s earnings call last week, it mentioned an advertising business also in its infancy:
I think we have a long ways to go in building out our advertising product. We are super excited about, I think, the growth we’ve seen. We are even more excited about I think the amount of demand that is coming into the ecosystem for a product like ours, where I think they recognize in addition to our growth and especially at our scale, they also see the opportunity across different categories. And so there’s a lot of excitement both from enterprise merchants, whether it’s in the restaurant category or in the non-restaurant categories as well as from advertisers …
Certainly, in advertising, it’s been a two and a half year effort.
I think it’s already among, I think, some of the most desired online advertising platforms. Yes, I think we’ve a very, very long road ahead.
The Bottom Line: At The Juice, we do our homework. We listen to conference calls. We pull up earnings reports. We read between the lines.
While not identical, incredibly similar stories continue to play out at UBER and DASH, in their core businesses and relatively new advertising segments. These companies are basically where Starbucks was, say, 10-15 years ago in their development. Yet, they’re already dominant players in their spaces. And their advertising clients are massive household names, who not only provide ad dollars, but help UBER and DASH remain top of mind at multiple points throughout the daily journeys of many consumers.
Sounds a lot like Amazon, but, we argue, with considerably more upside for long-term investors.
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