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DoorDash stock soars 20% after posting record order numbers

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Pictured is a DoorDash sign in a New York Restaurant on December 9, 2020.

Carlo Allegri | Reuters

Shares DoorDashThe stock rose by as much as 21% during pre-market trades on Thursday following the company’s acquisition reportedOn Wednesday, earnings showed record numbers of orders were placed for the fourth-quarter.

Deliveries company placed 369,000,000 orders in the fourth quarter. That’s a 35% rise year over year and higher than 361,000,000 orders that analysts had expected. The consumer continues to spend more money on their orders. The gross order value increased 36% over the year to $11.2 Billion, surpassing Wall Street’s projection of $10.6 billion.

Fourth quarter revenue was $1.3billion, which beat analysts’ projections of $1.28billion. Refinitiv had estimated a loss rate of 25 cents for each diluted share. The 45c loss reported by the company was higher than that recorded by Refinitiv.

DoorDash gained a lot from the stay-at-home trend during the coronavirus outbreak. Restaurants restricted indoor dining, and many consumers chose to order food online to avoid being exposed to the virus. Delivery companies now have to show they are able to sustain this demand, as Covid-19 restrictions ease.

DoorDash’s guidance for the full year indicated that it does not see any slowing of momentum. According to FactSet, analysts who surveyed the company, DoorDash’s market forecast value was between $48 billion-$50 billion. That is consistent with consensus estimates of $49.4 trillion.

Deepak Mathivanan, Wolfe Research analyst wrote that “Overall the demand for DASH delivery options remains steady even though normalcy slowly returns in many markets.” He sent a Thursday note to clients. The company has also made great progress scaling up several markets. [long term] initiatives.”

Fourth-quarter adjusted EBITDA (earnings after interest, taxes and amortization) was low, according to analysts. DoorDash said that it invests heavily to expand into new markets and other categories.

“We believe DASH’s investments in growth opportunities — new verticals, services, & geos—being funded by profit from its core US restaurant marketplace should be well received in a rising rate environment,” analysts at JPMorgan wrote in a note to clients on Thursday.

WATCH: DoorDash beats on revenues, Q4 total orders

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