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DoorDash Beats Earnings Expectations. Why the Stock Is Getting Crushed.

Nov 06, 2025 10:06:00 -0500 by Nate Wolf | #Consumer #Earnings Report

The delivery company plans to invest heavily in new initiatives in 2026. (Michael M. Santiago/Getty Images)

Key Points

DoorDash is investing in long-term growth, and shareholders aren’t happy about it.

The delivery company posted adjusted earnings of $1.48 a share for the third quarter, ahead of analysts’ consensus estimate of $1.25. Revenue totaled $3.45 billion, up 27% from a year ago and above Wall Street’s call for $3.35 billion.

But the stock dropped 16% to $200.15 on Thursday, as shareholders braced for an acceleration in spending.

The company said it plans to invest “several hundred million dollars” more in new initiatives and platform development in 2026 than in 2025. The investments include product development, autonomous delivery, and a new global tech platform that incorporates artificial intelligence.

“We wish there was a way to grow a baby into an adult without investment, or to see the baby grow into an adult overnight, but we do not believe this is how life or business works,” DoorDash said in a statement.

This isn’t the first time in 2025 that DoorDash stock has tumbled following news of significant investments. Shares fell in early May when the company announced deals to acquire the overseas delivery platform Deliveroo and the hospitality software company SevenRooms.

Thursday’s loss, however, would represent DoorDash stock’s largest single-day decline on record, according to Dow Jones Market Data. It was the worst performer in the S&P 500 for the day.

The company has been consistent in its preference to make near-term investments to maximize long-term profits, said Justin Patterson of KeyBanc Capital Markets. Wall Street, however, is likely to question the magnitude of the investments and the expectations for future returns, he said.

KeyBanc had a $325 price target and an Overweight rating on DoorDash shares, but Patterson said its financial model is under review.

The “payback period” for the coming investments is in line with DoorDash’s past initiatives, CEO Tony Xu said on a conference call, without offering a more specific timeline. The only difference is the company is now taking on more projects, he added.

Some analysts see the trade-off between short-term profit and long-term growth as worthwhile. The investments may mean some of DoorDash’s tech platforms would be temporarily redundant, while margins could be narrower than otherwise expected, but they should also expand the market DoorDash can address, said Mark Zgutowicz of Benchmark Equity Research.

“Given DASH’s proven ability to penetrate new verticals and markets, we view the investment opportunity as justified,” wrote Zgutowicz. The firm reiterated a Buy rating and lowered its price target to $315 from $320.

Seaport Research Partners concurred that margins may face near-term pressure, but the new investments didn’t alter the firm’s long-term expectations for DoorDash. Seaport reiterated a Neutral rating for the stock, saying that its fundamentals are strong and shares are fairly valued.

Write to Nate Wolf at nate.wolf@barrons.com