(Reuters) – Shares of DoorDash Inc surged 26% in premarket trade on Thursday after the food-delivery company beat estimates for quarterly revenue, a rare bright spot among stay-at-home darlings that have seen their stocks languish post results.
The company’s 34% revenue rise, although slower than the blistering pace recorded a year earlier, still indicated that people continued to prefer ordering meals online and eased some pressure on its shares, which closed near a record low on Wednesday.
If the stock holds its premarket gains, it would be DoorDash’s best day in nine months. Europe’s Deliveroo Plc and Delivery Hero also rose 1% and 2%, respectively.
Other pandemic winners, including gaming company Roblox and e-commerce firm Shopify Inc, have taken a hit this week as their forecasts have been weighed down by more people returning to pre-pandemic routines.
Video game companies Activision Blizzard Inc and Electronic Arts Inc have also issued disappointing forecasts this earnings season, while exercise bike maker Peloton Interactive Inc and streaming company Netflix saw their shares slump after results.
A gauge of European stay-at-home stocks by index provider Solactive has reversed nearly all its gains made since COVID-19 was declared a pandemic in 2020 and is down around 30% from its peak.
Still, DoorDash, like its European peers Deliveroo, Delivery Hero and Grubhub-owner Just Eat Takeaway.com, has seen the popularity of its food-delivery platform stick even as restaurants reopen.
“The food delivery business is here to stay … (but) the ones that will actually stand out are the ones that can offer the best prices for these deliveries,” Swissquote senior analyst Ipek Ozkardeskaya said.
However, food-delivery companies’ focus on chasing revenue growth through aggressive expansion is coming at a major cost as they struggle to turn a profit.
DoorDash reported a wider-than-expected loss, prompting some analysts to cut their price targets.
(Reporting by Medha Singh, Aishwarya Venugopal and Bansari Mayur Kamdar in Bengaluru; additional reporting by Danilo Masoni in Milan; Editing by Anil D’Silva)
