DoorDash Outperforms Revenue Expectations in Q4 Report, but Company Stock Drops in Pre-Market Trading

By Thomas Price Friday, February 26, 2021

Food delivery company DoorDash has released its first-ever quarterly report, and the reaction to it from most analysts has been incredibly mixed. While business has been up and the company posted record revenues, the uncertainty of the 2021 fiscal year and the heavy losses per share clouded the overall report. As a result of this, the company saw its shares drop heavily in pre-market trading, with many investors seeing the price per share as overvalued.

Delivery person in a mask and gloves carrying a takeout bag.

DoorDash Q4 Report vs. Expectations

In DoorDash’s first-ever quarterly report as a publicly traded company, the business generated $970 million in revenue. This figure represents an incredible 226% growth for DoorDash in comparison to the same time period the year before. The company also beat out analyst expectations which had only projected the food delivery business to earn $938 million. Other major highlights for the company include 273 million orders from customers in the quarter. In comparison to last year, this is a 233% growth, showing how incredibly large the demand for the food delivery company has gotten since the onset of the COVID-19 pandemic.

While revenues and demand exploded in Q4, the company also suffered heavy losses, causing concern for DoorDash moving forward. In fact, DoorDash reported a loss of $2.67 per share. The business also reported a GAAP net loss of $312 million, which is markedly more than the $123 million lost in the same time period a year ago. While some of it can be attributed to the cost of its recent IPO, the growth in losses has still worried many investors.

One strong highlight was that despite restrictions to dining easing in many areas across the United States (US), weekly order volume continued to grow.

DoorDash’s Future Outlook and Stock Market Reaction

The business also released 2021 fiscal year guidance which remained fairly positive as well. In fact, the expectation remains that there will be anywhere between $8.6 billion and $9.1 billion in gross order value in just Q1 alone, with adjusted earnings possibly reaching $45 million. The numbers scale up higher when accounting for the full year; however, the company is concerned about the possibility of a drop in overall volume if the easing of COVID-19 restrictions across the US causes a decline in demand.

Investors shared that concern leaving the food delivery business stock down over 9% in pre-market trading, dropping the value by over $16 per share.

In a joint statement accompanying the Q4 report, co-founder and CEO of the business Tony Xu and CFO Prabir Adarkar said, “We believe great companies operate at the lowest level of detail and execute with incredible efficiency in responding to the demands of those they serve. Exceptional ones see around the corner and develop capabilities that make entirely new forms of interaction possible. Our expectations of ourselves are high. We will do our best to exceed them.”

About the Author

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Tom Price is a writer focusing on entertainment and sports features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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