Food technology stocks present robust long-term potential. Digital food delivery markets could potentially surge from their current valuation of $203.87 billion in 2023 to a whopping $473.07 billion by 2030, underpinned by a notable 10.03% compound annual growth rate (CAGR). Consequently, the market’s promising growth, driven by rising smartphone usage and rapid urbanization, provides an ideal foundation for nurturing solid investment decisions.
Interestingly, despite promising underlying financial performance and palpable sector growth, food tech stocks navigated through a surprisingly tepid performance in 2023. Furthermore, a significant gap between operational performance and stock valuation persists despite companies consistently dishing up strong growth across both lines.
Nevertheless, given the growing global demand for food and emergent food technologies, a potential reversal may be brewing, poised to attract savvy investors in the upcoming financial periods. Therefore, these food technology stocks combine a unique combination of opportunity and forward-thinking potential.
DoorDash (DASH)
DoorDash (NYSE:DASH) confidently marks its presence in more than 4,000 cities, demonstrating remarkable financial performance this year with a 56% rise in its stock value year-to-date. The company’s robust progression is underscored by an earnings-per-share of 49 cents, exceeding expectations by 21 cents, alongside revenue of $2.13 billion, marking a 32.65% year-over-year growth in its most recent quarter.
Moreover, the forward return on equity growth solidifies the financial prowess, clocking in at an impressive 30.86%, significantly overshadowing the sector median of -6.55%. These figures pinpoint a rapid and efficient growth path and spotlight DoorDash’s ability to harbor extensive profitability.
Furthermore, the “Openbay” system instills a supportive mechanism for dashers, offering discounted car repairs and sharpened time management through Openbay Plus. This strategic incorporation provides a structured and supportive framework for dashers, ensuring the company steadily maintains its path, wherein every operational and financial metric propels it toward sustained success.
Uber (UBER)
Uber (NYSE:UBER) maintains a strong presence in the consumer sector, though profitability remains elusive. However, the rising popularity of Uber Eats presents a potential path to profits, positioning UBER stock as an attractive option in the food tech sphere.
Moreover, Uber Eats saw a notable uptick in the recent quarter, with gross delivery bookings growing 12% year-over-year to $15.6 billion. In the same quarter, delivery revenue surged an impressive $369 million, marking a 14% rise, and delivery-adjusted EBITDA profit rose by $230 million, a remarkable 232% rise compared to 2022.
Despite inflation, Uber Eats continues to grow, with the Uber One program playing a part. Its membership nearly doubled to around 12 million in 2022, indicating escalated user loyalty and spending. Additionally, Uber’s expansion into non-restaurant delivery sectors, such as groceries, is incredibly promising.
Deere & Company (DE)
Navigating through Deere’s (NYSE:DE) offerings reveals a foundational role in the technological enhancement of the global food industry. Efficient cultivation, facilitated by its robust and varied agricultural equipment, notably tractors and combines, positively impacts global food supply chains, ensuring a seamless transition from sowing to serving.
Financially, Deere also paints a picture of stability and steady growth, boasting an EPS of $10.20, outperforming by $1.99, and reaching revenue of $14.28 billion, which surpasses expectations by $219.62 million. Moreover, an impressive three-year EBITDA growth rate of 18.6% and consistent profitability indicate a reliably prosperous financial path. Notably, TipRanks analysts echo this positive outlook, offering DE a moderate buy rating and envisioning a potential upside of 16.5%.
Furthermore, Deere takes calculated steps toward technological elevation, incorporating artificial intelligence (AI) into its operations and showcasing its innovative streak by introducing an autonomous tractor. In essence, Deere intelligently invests in its technological abilities while maintaining its current market share, emphasizing its relevance and projected involvement in food technology advancements.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
