Doordash stock sinks 9% as company misses earnings, says it expects further spending

DoorDash reported mixed third-quarter results, with earnings per share missing analyst expectations at 55 cents versus 69 cents, despite revenue beating estimates at $3.45 billion and growing 27% year-over-year, leading to a 9% stock decline. The company announced plans to spend "several hundred million dollars" on new initiatives and a global tech platform in 2026, signaling increased near-term investment for long-term growth. Furthermore, DoorDash's Q4 Adjusted EBITDA guidance of $710M-$810M fell below analyst projections, though the recent Deliveroo acquisition is expected to contribute $45 million to Q4 Adjusted EBITDA and $200 million in 2026.

Analysis

DoorDash reported mixed third-quarter results, with earnings per share at $0.55 missing analyst expectations of $0.69, contributing to a 9% stock decline. Despite this, revenue surpassed estimates, reaching $3.45 billion against $3.36 billion expected, representing a robust 27% year-over-year increase. Net income significantly improved to $244 million from $162 million a year prior, and total orders grew 21% to 776 million, slightly exceeding FactSet's 770.13 million forecast.

The company's Q4 Adjusted EBITDA guidance, ranging from $710 million to $810 million (midpoint $760 million), fell below analyst projections of $806.8 million. This cautious outlook is partly attributed to plans to spend "several hundred million dollars" on new initiatives and a global tech platform in 2026, signaling increased near-term investment for long-term growth and acknowledging associated direct and opportunity costs.

DoorDash completed its $3.9 billion acquisition of Deliveroo on October 2, expecting it to contribute $45 million to Q4 Adjusted EBITDA and $200 million in 2026. However, significant future expenses, including $700 million in depreciation and amortization and $1.1 billion in stock-based compensation for fiscal year 2025, present a notable headwind, suggesting a period of elevated investment and cost absorption.

Key Decisions for Investors

• Monitor the execution and return on investment of DoorDash's substantial 2026 strategic investments, particularly the global tech platform and autonomous delivery initiatives, as these are critical for future growth and market positioning.
• Evaluate the integration and performance of the Deliveroo acquisition, ensuring it meets the projected $45 million Q4 and $200 million 2026 Adjusted EBITDA contributions to justify the $3.9 billion valuation.
• Consider the impact of significant anticipated expenses, including $700 million in D&A and $1.1 billion in stock-based compensation for FY2025, on near-term profitability and valuation metrics, which could pressure margins despite revenue growth.