DoorDash stock tumbled Thursday after the delivery giant missed third‑quarter profit estimates and issued a softer‑than‑expected outlook, even as orders and revenue surged. The slide—about 17.5% to near $197—made it the S&P 500’s worst performer on the day, though shares remain up roughly a fifth in 2025.
Key Points
Investors weighed robust top‑line momentum against swelling costs and plans to step up spending in 2026, including on new products and initiatives such as delivery robots. That trade‑off rattled sentiment and put DoorDash stock under heavy pressure despite healthy demand across the platform.
Why the selloff hit DoorDash stock
Earnings per share came in at $0.55 for Q3, below analyst expectations compiled by Visible Alpha. Revenue rose 27% year over year to $3.45 billion, ahead of forecasts, underscoring strong consumer engagement.
- Orders: 766 million, up 21% year over year
- Marketplace GOV: $25 billion, up 25%
- Costs and expenses: $3.19 billion, up 23%
Management also guided to the current‑quarter adjusted EBITDA of $710 million to $810 million, short of consensus. Combined with a plan to spend “several hundred million dollars” more in 2026 than in 2025, investors fretted about nearer‑term profitability—pressure that weighed directly on DoorDash stock.
Inside the numbers: growth vs. profitability
The results highlight a familiar balancing act: expanding the platform while maintaining margin progress.
- Strong demand: Double‑digit growth in orders and GOV shows steady consumer appetite and merchant adoption.
- Cost curve: Higher operating costs reflect expansion into new offerings and technology bets, including automation pilots.
- Profit optics: A miss on EPS and a lighter EBITDA outlook amplified concerns that 2026 investment could compress margins before benefits scale.
For traders focused on earnings momentum, that mix was enough to push DoorDash stock sharply lower, even with outperformance on revenue.
What management signaled about 2026
Leadership framed the investment ramp as essential to building the next leg of growth. The company noted spending in 2026 will exceed 2025 by several hundred million dollars as it broadens its reach and develops new products—an approach it likened to growth requiring deliberate investment over time, rather than overnight gains.
The message: short‑term margin pressure in exchange for a larger addressable market and improved efficiency down the road. Whether that trade‑off supports a durable premium for DoorDash stock will depend on execution, payback timelines, and the cadence of EBITDA delivery through 2025–2026.
Market context: a standout decliner—even after a strong year
The 17.5% drop left DoorDash stock near $197 at the close, the steepest decline in the S&P 500 on Thursday. The move followed a strong year to date—shares have still added close to 20% in 2025—suggesting a reset in expectations rather than a collapse in the growth narrative.
Volatility around earnings is common for high‑growth, investment‑heavy firms. DoorDash stock has tended to react sharply when profitability tracks below the pace implied by revenue and order growth.
Where the growth is coming from
Top‑line momentum reflects scale and breadth:
- Marketplace strength: GOV up 25% indicates larger basket sizes and more frequent ordering.
- Order expansion: 21% growth to 766 million orders shows continued user engagement and category depth.
- Product pipeline: Investments in new initiatives, including delivery robots and platform enhancements, target improved unit economics and service quality over time.
The near‑term friction is the timing mismatch between expense recognition and revenue contribution from these initiatives—a dynamic front and center for DoorDash stock in the latest selloff.
How Wall Street reacted to DoorDash stock
Initial takes from major brokers struck a supportive but more cautious tone.
- Deutsche Bank: Reiterated a buy‑equivalent view while reducing its price target to $298 to reflect higher spending and a slower EBITDA ramp.
- Oppenheimer: Maintained an outperform rating and lowered its target to $280, citing confidence in the long‑term opportunity but a tempered near‑term outlook due to 2026 investment plans.
The common thread: long‑term growth potential remains, but the near term requires patience as spending rises. That split view helps explain the immediate pressure on DoorDash stock alongside supportive longer‑term ratings.
What the outlook says—and what it doesn’t
The adjusted EBITDA range of $710 million to $810 million for the current quarter came in below consensus, signaling more conservative profitability into year‑end. Management also telegraphed higher 2026 spending but did not provide detailed line‑item timing or payback assumptions.
For investors in DoorDash stock, the missing pieces include:
- The pace at which new products drive incremental orders, higher attach rates, or better courier efficiency
- Unit‑economics milestones for automation pilots
- The trajectory of operating leverage as scale expands in 2025–2026
Clarity on those points will help markets reassess valuation and reset expectations for the earnings path.
Competitive and macro backdrop
DoorDash continues to operate in a competitive on‑demand landscape where platforms balance promotions, fees, and courier incentives. Macro conditions—consumer spending power, wage trends, and fuel costs—also shape unit economics.
That said, the company’s scale in U.S. food delivery remains an advantage, supporting frequency and merchant partnerships. Sustaining that lead, while expanding into adjacent categories, is central to the investment case underpinning DoorDash stock.
Investor takeaways: how to read the reset
Three considerations for investors evaluating DoorDash stock after the drop:
- Execution over optics: Revenue and order growth remain robust, but the market wants proof that investment can coexist with a steady EBITDA ramp.
- Guidance discipline: A conservative outlook lowers the bar for positive surprises; consistent delivery could stabilize sentiment.
- Time horizon matters: Near‑term profitability pressure is a headwind for momentum accounts; long‑term holders may focus on market share, category expansion, and automation payoffs.
What to watch next
Catalysts that could sway DoorDash stock in the coming weeks and quarters:
- Updated profitability markers: Any revisions to the EBITDA outlook or signs of operating leverage improvement
- Unit economics: Evidence that automation, product enhancements, or logistics upgrades improve cost per order
- Category expansion: Progress in newer verticals and international reach, if disclosed
- Capital allocation: Signals around buybacks, M&A, or capex discipline relative to growth opportunities
- Competitive dynamics: Pricing, promotions, and merchant retention across the sector
The bottom line
Strong demand met rising costs, and the result was a volatile day for DoorDash stock. A profit miss, lighter EBITDA guidance, and a stepped‑up 2026 investment plan overshadowed impressive growth in orders, GOV, and revenue. Analysts trimmed targets but kept favorable ratings, suggesting confidence in the long‑term story with caution on near‑term margins.
From here, the burden is on execution. Clear milestones on unit economics and a steadier profitability glide path would go a long way toward rebuilding momentum in DoorDash stock while sustaining the company’s growth ambitions.
FAQ’s
What were DoorDash’s Q3 results?
Revenue rose 27% to $3.45B, beating forecasts. Orders grew 21% to 766M; marketplace GOV climbed 25% to $25B. Costs/expenses increased 23% to $3.19B, contributing to the EPS miss.
Is DoorDash planning higher investment in 2026?
Yes. Management expects to spend several hundred million dollars more in 2026 vs. 2025 to fund new products and initiatives, including automation, which may weigh on short‑term profitability.
How did analysts react to the earnings?
Deutsche Bank and Oppenheimer maintained buy/outperform views but cut price targets to $298 and $280, respectively, citing heavier spend and a softer near‑term outlook.
Article Source: Investopedia
