DoorDash (DASH) has cemeted a dominant position in the fiercely competitive food-delivery market over the past several years, outpacing rivals like GrubHub, Uber Eats, and Seamless.
This remarkable success has placed DASH stock among the four companies set to join the S&P 500, effective before the start of trading on March 24, 2025.
Companies to join the S&P 500:
- DoorDash (DASH)
- TKO Group Holdings (TKO)
- Williams-Sonoma (WSM)
- Expand Energy (EXE)
Companies to leave the S&P 500:
- BorgWarner (BWA)
- Teleflex (TFX)
- Celanese (CE)
- FMC (FMC)
These changes are part of the index's regular adjustments to better represent America's large-cap market segment.
A company's market capitalization must exceed $14.5 billion to qualify for inclusion in the S&P 500. All changes will be effective at the start of trading on March 24.
DoorDash and FMC exemplify two companies moving in opposite directions.
Food delivery: Booming Industry
Since Covid, food delivery has evolved from a luxury to a near-essential service.
In the U.S., spending on third-party delivery for quick-service restaurants surged from approximately $0.4 billion at the pandemic's onset in 2020 to about $1.4 billion three years later.
Founded in San Francisco eight years after GrubHub, DoorDash surpassed both GrubHub and Uber Eats in 2019 to become the leading food delivery service in the U.S.
It now commands 67% of the U.S. food-delivery market share, a significant increase from 18% in 2018. DASH stock has appreciated 9.7% year-to-date on Nasdaq and 38.9% over the past 12 months.
The company has also diversified its operations, establishing 150,000 partnerships with non-restaurant merchants as of 2024, according to Cavenagh Research.
In Q4, DoorDash's revenue grew 24% year-over-year to $2.9 billion. It processed over 685 million orders across more than 30 countries, totaling $21.3 billion in gross value.
The company appears poised to further expand its market share, as "food delivery could become a winner-takes-all market, as scale drives unbeatable efficiencies—larger platforms like DoorDash," notes Cavenagh Research.
DoorDash's market cap now stands at $77 billion.
FMC's struggles and leadership's response
When Pierre Brondeau returned to agriscience company FMC last summer as chairman and CEO, four years after retiring, the company's stock was in poor condition.
FMC ended the previous year as the second-worst performer on the S&P 500, with a 49.5% loss.Although 2024 was less severe, FMC shares still declined by 22.9%.
The stock plummeted another 35% after the company reported its Q4 earnings in February, despite some positive aspects.
FMC reported revenue of $1.22 billion, a 7% increase compared to Q4 2023. Its quarterly earnings of $1.79 per share surpassed Wall Street's projection of $1.60 per share.
However, its $1.2 billion in sales slightly missed the $1.3 billion consensus. The recent drop in share price brought it down to levels not seen since 2011.
"The company needs a stronger reset than what I thought initially," Brondeau said during the earnings conference call. The CEO purchased 54,000 shares of FMC stock last week, valued at $1.9 million.
"My recent purchase of nearly $2 million in FMC shares reflects my personal confidence in our company's strategy and future," Brondeau explained in an email to Barron's.
The company's market cap is $5 billion.
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