Image Source: CNBC
In a disappointing turn of events for investors, DoorDash saw its stock plummet by 14% following the release of its third-quarter earnings report, which failed to meet analysts’ expectations. As reported by CNBC, the food delivery giant announced it would incur significant expenditures in 2026 aimed at supporting new initiatives and technological advancements.
During the earnings call, DoorDash reported earnings of 55 cents per share, falling short of the anticipated 69 cents. While the revenue figures did show some promise at $3.45 billion, exceeding the expected $3.36 billion, the overall outlook was overshadowed by the company’s decision to increase spending substantially.
What Caused the Drop in Dash Stock?
Analysts were clearly taken aback by the results, which led to a surprising downturn for dash stock. The decline occurred shortly after DoorDash announced plans to invest “several hundred million dollars” in further expansion within its operations.
In its earnings release, the company articulated a sentiment that resonated with many in the business community: “We wish there was a way to grow a baby into an adult without investment or to see the baby grow into an adult overnight, but we do not believe this is how life or business works.” This metaphor strongly conveyed the company’s long-term vision, although it did little to placate shareholders concerned about current profitability.
The Shift Towards Future Spending
DoorDash is pivoting to develop a new global tech platform, which it believes will be crucial for its future growth. The firm revealed that while progress was made in 2025, an acceleration of development is planned for 2026, indicating a focus on long-term investments over short-term gains. This approach reflects a broader trend in the tech sector where companies prioritize tech infrastructure to enhance competitiveness.
Additionally, DoorDash’s new autonomous delivery robot, which was announced in September, aims to solidify its market positioning amidst growing competition in the food delivery sector.
Performance Highlights and Forecast
Despite the stock’s free fall, there were some encouraging signs within the earnings results. DoorDash reported a 27% increase in revenue compared to the previous year, illustrating its growing popularity in the competitive delivery landscape. Net income also saw an uptick, at $244 million, which is up from $162 million a year prior, demonstrating stronger operational efficiency.
- Total orders during the quarter rose by 21% to 776 million, slightly above the anticipated 770.13 million.
- For the upcoming fourth quarter, DoorDash projects an Adjusted EBITDA in the range of $710 million to $810 million, with a midpoint at $760 million.
The company also disclosed the conclusion of its acquisition of Deliveroo, a move finalized on October 2, valued at approximately $3.9 billion. This acquisition is expected to contribute $45 million to adjusted EBITDA in Q4 and around $200 million in 2026.
Looking Ahead
Investors are now closely monitoring the impacts of DoorDash’s strategic decisions, especially as it relates to its projections for depreciation and amortization expenses, which are expected to be $700 million for the fiscal year, and a forecasted $1.1 billion for stock-based compensation.
The stark contrast between DoorDash’s growth potential and current financial realities presents a complex landscape for stakeholders. Will this heavy investment strategy pay off in the long run? Only time will tell, but it’s clear that the next year will be pivotal in determining the trajectory of DoorDash amid an intensely competitive market.
FAQs
What caused the recent drop in DoorDash stock price?
The drop was primarily due to DoorDash missing earnings expectations and announcing significant future spending, leading to investor concerns.
How much did DoorDash’s stock fall after the earnings report?
DoorDash’s stock fell by 14% following its third-quarter earnings report.
What are DoorDash’s future spending plans?
DoorDash plans to invest several hundred million dollars in new initiatives and technology developments in 2026.
What acquisition did DoorDash finalize recently?
DoorDash finalized its acquisition of Deliveroo for approximately $3.9 billion on October 2.
What was DoorDash’s revenue for the third quarter?
DoorDash reported revenue of $3.45 billion for the third quarter of 2025.
