What Happened?
Shares of on-demand food delivery service DoorDash (NYSE: DASH) jumped 5.6% in the morning session after it announced a new on-demand delivery partnership with apparel retailer Old Navy.
DoorDash noted it had seen increased demand for on-demand apparel, and this partnership marked a significant milestone. The move signaled the company's expansion beyond its core restaurant delivery business. This news followed the company's recent third-quarter report, which showed that revenue grew 27.3% compared to the same quarter in the previous year. Adding to the positive developments, DoorDash also expanded its partnership with Coco Robotics to include autonomous delivery in Miami. One analyst firm, which maintained a Buy rating on the stock, noted that a recent drop in share price following an investment announcement was a "buying opportunity.".
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What Is The Market Telling Us
DoorDash’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 8 days ago when the stock dropped 15.5% on the news that the company reported third-quarter results that missed profit expectations and provided a weaker-than-expected forecast for the upcoming quarter, raising concerns about future profitability. While the food delivery service's revenue of $3.45 billion for the third quarter surpassed analyst estimates, its GAAP earnings per share of $0.55 fell short of the consensus forecast of $0.68. More importantly, DoorDash's guidance for the fourth quarter was a significant point of concern for investors. The company projected adjusted EBITDA of $760 million at the midpoint, which was considerably below Wall Street's expectation of $822.4 million. This weaker outlook suggested potential pressures on profitability, overshadowing the revenue beat and leading to a sharp sell-off in the company's shares.
DoorDash is up 22% since the beginning of the year, but at $208.11 per share, it is still trading 26.1% below its 52-week high of $281.74 from October 2025. Investors who bought $1,000 worth of DoorDash’s shares at the IPO in December 2020 would now be looking at an investment worth $1,098.
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