DoorDash Shares Rise in Revenue and Stands Out Among Pandemic Darlings

A DoorDash sign is pictured on a restaurant in the New York neighborhood of Manhattan, New York, U.S., December 9, 2020. REUTERS/Carlo Allegri/File Photo

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Feb 17 (Reuters) – Shares of DoorDash Inc (DASH.N) jumped 26% in premarket trading on Thursday after the food delivery company beat quarterly revenue estimates, a rare bright spot among darlings Homemakers who have seen their actions languish after the results.

The company’s 34% rise in revenue, while slower than the blistering pace a year earlier, still indicates that people continue to prefer ordering meals online and is easing pressure on its shares, which closed near from a record high on Wednesday.

If the stock holds onto its pre-market gains, it would be DoorDash’s best day in nine months. European companies Deliveroo Plc (ROO.L) and Delivery Hero (DHER.DE) also rose 1% and 2% respectively.

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Other pandemic winners, including games company Roblox (RBLX.N) and e-commerce company Shopify Inc, took a hit this week as their forecasts were weighed down by more people returning to pre-game routines. -pandemics.

Video game companies Activision Blizzard Inc (ATVI.O) and Electronic Arts Inc (EA.O) also posted disappointing forecasts this earnings season, while exercise bike maker Peloton Interactive Inc (PTON.O) and streaming company Netflix saw their shares tumble after results. Read more

A gauge of European stay-at-home stocks by index provider Solactive (.SOLSTAYE) has reversed almost all of its gains since COVID-19 was declared a pandemic in 2020 and is down around 30% from its peak.

Yet DoorDash, like its European peers Deliveroo, Delivery Hero and Just Eat Takeaway.com (TKWY.AS), owner of Grubhub, has seen its food delivery platform’s popularity hold even as restaurants reopen.

“The food delivery industry is here to stay… (but) those who will really stand out are those who can offer the best prices for those deliveries,” said Ipek Ozkardeskaya, principal analyst at Swissquote.

However, food delivery companies’ focus on pursuing revenue growth through aggressive expansion comes at a major cost as they struggle to turn a profit.

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

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Reporting by Medha Singh, Aishwarya Venugopal and Bansari Mayur Kamdar in Bengaluru; additional reporting by Danilo Masoni in Milan; Editing by Anil D’Silva

Our standards: The Thomson Reuters Trust Principles.


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