DoorDash shares surge on revenue beat, stand out among pandemic darlings

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The company’s 34% revenue rise, although slower than the blistering pace recorded a year earlier, still indicated that people continued to prefer ordering meals online and eased some pressure on its shares, which closed near a record low on Wednesday.

If the stock holds its premarket gains, it would be DoorDash’s best day in nine months. Europe’s Deliveroo Plc and Delivery Hero also rose 1% and 2%, respectively.

Other pandemic winners, including gaming company Roblox and e-commerce firm Shopify (NYSE:SHOP) Inc, have taken a hit this week as their forecasts have been weighed down by more people returning to pre-pandemic routines.

Video game companies Activision Blizzard Inc (NASDAQ:ATVI) and Electronic Arts Inc (NASDAQ:EA) have also issued disappointing forecasts this earnings season, while exercise bike maker Peloton Interactive (NASDAQ:PTON) Inc and streaming company Netflix (NASDAQ:NFLX) 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 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 coming at a major cost as they struggle to turn a profit.

DoorDash reported a wider-than-expected loss, prompting some analysts to cut their price targets.