(Reuters) – Shares of DoorDash Inc surged 16.5% on Thursday after the food-delivery company beat estimates for quarterly revenue, a rare bright spot among stay-at-home darlings that have seen their stocks languish post results.
The company’s 34% revenue rise, although slower than the blistering pace recorded a year earlier, indicated that people still preferred getting their meals and other items such as groceries delivered to their doorstep.
If the stock holds its gains, it would be DoorDash’s best day in nine months and a bounce back from a record low close a day earlier.
“This steady growth shows a heightened consumer interest and demand for delivery in non-restaurant categories, with DoorDash well positioned to take advantage of it,” Needham analysts said.
Shares of other pandemic winners, including gaming company Roblox and e-commerce firm Shopify Inc, have comer under pressure this week on disappointing forecasts, triggered by more people returning to their pre-pandemic routines.
Video game companies Activision Blizzard Inc and Electronic Arts Inc have also issued dour outlooks this earnings season, while exercise bike maker Peloton Interactive Inc and streaming company Netflix saw their shares slump after results.
A gauge of European stay-at-home stocks by index provider Solactive has reversed nearly all its gains made since COVID-19 was declared a pandemic in 2020 and is down around 30% from its peak.
Still, DoorDash – like Uber Eats and its European peers Deliveroo , Delivery Hero and Grubhub-owner Just Eat Takeaway.com – has seen the popularity of its food-delivery platform stick even as restaurants reopen.
“The food delivery business is here to stay … (but) the ones that will actually stand out are the ones that can offer the best prices for these deliveries,” Swissquote senior analyst Ipek Ozkardeskaya said.
However, food-delivery companies’ focus on chasing revenue growth through aggressive expansion is squeezing their margins.
DoorDash reported a wider-than-expected loss, prompting some analysts to cut their price targets.
(Reporting by Medha Singh, Aishwarya Venugopal and Bansari Mayur Kamdar in Bengaluru; additional reporting by Danilo Masoni in Milan; Editing by Anil D’Silva)
