In the quarter ending on December 31, total orders surged by 23% to 574 million, as stated by the company in a report released on Thursday, surpassing the average forecast of 561.8 million by analysts. Furthermore, the gross value of these orders, a critical metric for online delivery companies, soared by 22% to $17.6 billion, outperforming Wall Street’s expectations.

However, despite these impressive figures, investors on Wall Street remained unimpressed, especially considering the stock’s 28% increase over the year. Following the announcement, the stock experienced a significant downturn, plunging by as much as 12% during after-hours trading, following its close at $126.27, nearing a two-year peak.

Analysts at Evercore ISI conveyed their sentiments in a note to investors, suggesting that given the recent surge in the company’s shares, the reported results were deemed insufficient to meet expectations.

Leading restaurant delivery platform

Evercore also highlighted that the adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $363 million failed to surpass the upper end of the company’s forecast range of $320 million to $380 million. This marked the first instance since the fourth quarter of 2022 that DoorDash fell short of its own EBITDA guidance, as noted by the analysts.

DoorDash, the leading restaurant delivery platform in the United States, has embarked on a series of substantial investments aimed at diversifying its offerings into new sectors, ranging from floral arrangements to alcohol and groceries. Additionally, it has expanded its footprint in international markets and ventured into the realm of advertising. These strategic initiatives propelled the platform’s monthly active users to an all-time high of over 37 million by the end of the year, accompanied by a year-over-year surge in average order frequency.

Moreover, DoorDash Stock reported an increase in the number of subscribers to its DashPass and Wolt+ membership programs by approximately 20%, totaling more than 18 million members.

Enhancements in logistics efficiency coupled with a larger contribution from advertising initiatives drove revenue up by 27% to $2.3 billion in the quarter, slightly surpassing estimates of $2.24 billion. Consequently, the company managed to significantly narrow its net loss to $156 million from $642 million recorded a year earlier.

DoorDash stock reverses course following earnings bump, analyst warns of macro headwinds

DoorDash stock Optimistic outlook for continued growth and expansion 

Throughout the previous year, DoorDash onboarded over 100,000 new merchants onto its platform, expanding its offerings beyond restaurants. The company’s non-restaurant merchants now exceed 150,000, with notable additions such as Royal Ahold Delhaize NV, the parent company of Stop & Shop and Hannaford, which joined in February.

CEO Tony Xu acknowledged that despite progress made, there is still considerable work to be done to enhance consumer awareness of DoorDash’s non-restaurant delivery services, particularly in overseas markets where its presence remains relatively limited.

Looking ahead, DoorDash Stock forecasts a gross order value ranging from $18.5 billion to $18.9 billion for the current period, with adjusted EBITDA expected to range between $320 million and $380 million. These forecasts, although slightly below analyst expectations at the mid-point, indicate the company’s optimistic outlook for continued growth and expansion in the coming months.