DoorDash stock falls over 2024 order growth concerns

Shares of DoorDash (DASH) fall Friday, despite the delivery service app beating fourth-quarter revenue estimates. However, the delivery service continues to struggle to return to pre-pandemic levels of growth. In particular, DoorDash trails behind leading delivery competitor Uber (UBER) in key metrics.

AKIKO FUJITA: Shares of DoorDash under pressure down more than 10% right now despite the delivery giant beating expectations in its latest quarterly results to discuss how this compares to what we’re seeing across the delivery industry. We’ve got our very own Brooke DiPalma breaking down the numbers for us. Brooke, there was growth there but not enough for investors.

BROOKE DIPALMA: Yeah. Good morning, Akiko. Investors certainly disappointed this past quarter as DoorDash, Uber Eats, Instacart, this crowded competitive landscape for food delivery continues to rise, especially as they all try to navigate this post COVID world. So let’s break this down in three different ways. First I’m taking a closer look at DoorDash’s marketplace gross order value that we saw last quarter. Well, it increased 22% to $17.6 billion.

And like you noted, that beat expectations. But it’s important to note that year over year growth is less than what we saw the same time period last year when we saw year-over-year growth up 29%. And we heard a similar anecdote earlier this week from Instacart. They saw orders grow, albeit at a slower pace than compared to the year prior. And now DoorDash for its 2024 outlook, they do expect gross order value of $74 to $78 billion.

That’s slightly below consensus estimates. And that’s really putting pressure on shares today. Now the second thing I’m taking a closer look at is revenue comparison of DoorDash’s revenue for Q4 compared to Uber Eats revenue, that Uber delivery service in Q4. And when you take a closer look, you can see that DoorDash brought in $2.3 billion. Uber Eats brought in about a billion more at $3.1 billion.

A crucial factor here that’s really important to note is that this is not the only revenue stream for Uber Eats. Uber also for Uber rather Uber also has that freight business. Uber also has the ride business, which is a huge part of their Uber revenue stream. So total revenue for Uber this past quarter was $9.9 billion. They’re generating more cash, and they’re also providing a greater return for investors, both companies, DoorDash and Uber, announced buybacks recently.

Uber coming in with a $7 billion buyback, DoorDash coming in with a $1.1 billion buyback. And ultimately Uber just has more cash on hand. Uber has nearly $4.7 billion cash on hand. DoorDash has $2.7 billion cash on hand. And a JP Morgan analyst writing in a note that Uber is the global leader in rideshare and grocery delivery. So we’ll continue to watch how this landscape plays out over the next year.

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