DoorDash Inc DASH.N has reported quarterly revenue that beat estimates as food delivery demand showed no sign of slowing, indicating ordering habits have changed permanently.
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Analysts have said that people have grown accustomed to having food delivered to their doorsteps after frequently ordering in during the peak of the pandemic. They expect DoorDash and rivals Uber Eats UBER.N and Grubhub to show strong growth for several years even as people venture out more.
Uber's shares rose 1%, while the US-listed shares GRUB.O of Grubhub parent Just Eat Takeaway.com NV gained 2%.
"It's very possible to eat at a restaurant and get delivery because we eat three times or more maybe per day, and that's over 100 shopping moments per month," Chief Executive Officer Tony Xu said on an earnings call.
In the fourth quarter ended Dec. 31, higher-than-expected consumer retention and new customer growth helped DoorDash's revenue jump 34% to $1.30 billion and beat estimates of $1.28 billion, according to IBES data from Refinitiv.
"To the extent that pent-up demand for dining in would eat into revenue, it would only serve to dampen some growth temporarily, not reverse it for long periods," CEO of e-commerce management platform CommerceIQ Guru Hariharan said.
San Francisco-based DoorDash also forecast first-quarter marketplace gross order value, the total value of all app orders and subscription fees, between $11.4 billion and $11.8 billion, versus $11.2 billion in the reported quarter.
Even in the face of inflation, consumers' persistent willingness to pay for the convenience of delivery should support demand, M Science analyst Matthew Goodman said.
DoorDash has also doubled down on non-restaurant offerings, including grocery, pet food and alcohol to attract more users. It has tied up with a number of retailers, including Ulta Beauty ULTA.O, Bed Bath & Beyond BBBY.O and PetSmart.
DoorDash also forecast core earnings in a range of break-even to $500 million for fiscal 2022, compared with estimates of $455.1 million.
DoorDash Shares Surge On Revenue Beat, Stand Out Among Pandemic Darlings
The above news was followed by news that shares of DoorDash Inc DASH.N surged 16.5% on Thursday 17 February 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 RBLX.N and e-commerce firm Shopify Inc SHOP.N, 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 ATVI.O and Electronic Arts Inc EA.O have also issued dour outlooks this earnings season, while exercise bike maker Peloton Interactive Inc PTON.O and streaming company Netflix NFLX.O saw their shares slump after results.
A gauge of European stay-at-home stocks by index provider Solactive .SOLSTAYE 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 UBER.N and its European peers Deliveroo ROO.L, Delivery Hero DHER.DEand Grubhub-owner Just Eat Takeaway.com TKWY.AS- 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.
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