TLDR
- DoorDash shares dropped nearly 10% Thursday after Q3 earnings missed analyst expectations at 55 cents per share versus 68 cents expected.
- Revenue jumped 27% to $3.45 billion, beating the $3.36 billion forecast, driven by $25 billion in gross order value.
- The company plans to invest “several hundred million dollars more” in 2026 for new initiatives and platform development.
- Wells Fargo slashed its price target from $301 to $239 and cut 2026 EBITDA estimates by 19% to $3.6 billion.
- DoorDash aims for $100 billion in gross order value by 2026 while completing its $3.9 billion Deliveroo acquisition.
DoorDash stock fell sharply in early Thursday trading despite beating revenue expectations. The food delivery platform reported third-quarter results that left investors concerned about future profitability.
Revenue climbed 27% year-over-year to $3.45 billion. This surpassed Wall Street’s $3.36 billion estimate.
But earnings per share came in at just 55 cents. Analysts expected 68 cents per share.
The company processed 776 million orders during the quarter. This represented a 21% jump from last year.
Marketplace gross order value reached $25 billion. That marked 25% growth compared to the prior-year period.
DoorDash attributed the growth to expanded consumer base and higher engagement rates. But the earnings shortfall and forward guidance sparked the sell-off.
Investment Strategy Pressures Stock Price
The company announced plans for heavy reinvestment in 2026. DoorDash will commit “several hundred million dollars more” to new initiatives and platform development.
Management said many experiments are now ready for greater investment. This strategy caught investors off guard.
Wells Fargo analyst Ken Gawrelski responded by cutting the price target from $301 to $239. The firm lowered its 2026 EBITDA forecast by 19% to $3.6 billion.
This sits well below the consensus estimate of $4.2 billion. The bank noted DoorDash’s approach contradicted expectations for margin expansion.
Several other analysts followed with price target cuts. UBS lowered its target to $241, while Stifel moved to $253.
Growth Targets and Deliveroo Deal
DoorDash projects fourth-quarter marketplace gross order value between $28.9 billion and $29.5 billion. The company expects adjusted EBITDA of $710 million to $810 million.
Management stated margins will go “up slightly” next fiscal year. However, the reinvestment plans will limit margin expansion.
The company is acquiring British food delivery firm Deliveroo for $3.9 billion. The deal remains in progress.
DoorDash set an ambitious target of $100 billion in gross order value by 2026. Wells Fargo revised its 2026 gross order value forecast upward to $131.6 billion.
The platform expects 21% core gross order value growth in 2026. This represents a deceleration of 200 basis points from 2025 levels.
Wells Fargo’s analysis indicates 2026 EBITDA margins will be “flattish to slightly higher.” The company maintains more cash than debt on its balance sheet.
Current EBITDA stands at $834 million. The stock holds a Moderate Buy rating from 31 analysts.
Twenty-three analysts rate it Buy, while eight assign Hold ratings. The average price target of $311.86 suggests 31% upside potential from current levels.
Individual analyst targets range from $205 to $360. BTIG maintained a Buy rating with a $315 price target despite the reinvestment concerns.
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