DoorDash Shares Drop 10% as Focus on Growth Reinvestment Outweighs Earnings Outperformance

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DoorDash Shares Drop 10% as Focus on Growth Reinvestment Outweighs Earnings Outperformance

Bitget-RWA2025/11/06 12:50

By:Bitget-RWA

- DoorDash's stock fell over 10% post-earnings despite $3.45B revenue beat, driven by 25% GOV growth and 21% order increase. - Management signaled $300M+ 2026 AI/tool investments and revised Deliveroo's EBITDA contribution down by $32-40M due to accounting changes. - Analysts cut price targets (Wells Fargo to $239) as $754M adjusted EBITDA (up 41%) was overshadowed by reinvestment concerns despite $723M free cash flow. - 42% YTD gains amplified sell-off sensitivity, with 31 analysts retaining "Moderate Buy

Shares of DoorDash (DASH) tumbled by more than 10% in after-hours trading on November 5, 2025, after the food delivery leader posted third-quarter results that fell short of expectations, even though revenue growth remained robust. The sharp decline reflected investor unease about management’s intention to boost spending in 2026 and a revised forecast for Deliveroo’s earnings impact, as reported by a

TS2 article

The company’s third-quarter revenue reached $3.45 billion, topping the consensus estimate of $3.36 billion, according to a

Blockonomi article

, fueled by a 25% year-over-year jump in marketplace gross order value (GOV) to $25.0 billion, as detailed in a

TS2 recap

. Total orders climbed 21% from a year earlier to 776 million, based on an

IndexBox report

, and adjusted EBITDA rose to $754 million, marking a 41% increase year-over-year, according to a

Seeking Alpha note

DoorDash Shares Drop 10% as Focus on Growth Reinvestment Outweighs Earnings Outperformance image 0

Still, earnings per share (EPS) were $0.55, falling short of the $0.68–$0.69 range projected in a

Morningstar report

The earnings shortfall was further impacted by management’s guidance for higher investment in 2026.

DoorDash

announced plans to allocate “several hundred million dollars more” next year toward platform enhancements and new projects, including AI-powered features, according to an

Investing.com piece

. Alongside this, a new accounting approach for its recent Deliveroo acquisition lowered the UK delivery firm’s expected 2026 adjusted EBITDA contribution by $32–$40 million, as noted in a

Bloomberg article

. Deliveroo is now anticipated to contribute $200 million to EBITDA in 2026, a figure that falls short of earlier projections in a

Blockchain.news post

Investor confidence weakened further after the company raised its Q4 2025 GOV forecast to $28.9–$29.5 billion but trimmed its adjusted EBITDA outlook to $710–$810 million, as highlighted in a

TradingView roundup

. Although the holiday quarter guidance surpassed analyst expectations, the increased spending plans overshadowed the positive trends. “We wish there was a way to grow a baby into an adult without investment,” DoorDash commented in its earnings statement, emphasizing the balance between immediate profits and future expansion.

Analysts responded quickly. Wells Fargo reduced its price target for

DASH

from $301 to $239, citing lower EBITDA projections for 2026. UBS and Stifel also cut their targets, but the stock maintained a “Moderate Buy” consensus among 31 analysts, with an average target price of $311.86. Despite the sell-off, DoorDash’s financial position remained solid, generating $723 million in free cash flow during the third quarter.

The share price drop followed a 42% gain since the start of the year, heightening sensitivity to profit-taking and concerns about reinvestment. The company’s upcoming earnings call at 5:00 p.m. ET on November 5 is expected to shape short-term trading, as investors look for more information on capital deployment, the integration of Deliveroo, and holiday season demand.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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