Food delivery service company DoorDash (DASH) has soared in the past year, with shares up 129%. One trader sees shares continuing to trend higher.
That’s based on the June $120 calls. With 86 days until expiration, 43,036 contracts traded compared to a prior open interest of 527, for an 82-fold rise in volume on the trade. The buyer of the calls paid $25.22 to make the bullish bet.
DoorDash shares recently traded for about $138, meaning about $18 of the option’s price is already in-the-money. DoorDash recently set a new 52-week high of $140 per share.
DoorDash has had a strong year, with revenues rising by 27%. However, the company is still not profitable, although it is trending in that direction.
Currently, DoorDash has over $4 billion in cash on its balance sheet, and just over $500 million in debt. So it likely won’t have to issue more shares or increase its debt anytime soon.
Action to take: Shares are in an uptrend, and the company is performing well operationally. The stock likely has some more upside ahead as a momentum play.
For traders, the June calls are already deep in-the-money, and can likely see further double-digit returns from here. More aggressive traders may want to buy out-of-the-money calls for a better percentage return.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.