DoorDash (DASH) shares slumped lower Friday after the food delivery specialists posted stronger-than-expected first quarter sales and issued a robust near-term outlook for customer orders and overall activity.
Shares in the group were pressured, however, by a litany of analysts' downgrades and price target reductions linked to flat second-quarter activity forecasts and a wider-than-expected first quarter loss.
DoorDash said gross order value, its metric for both DashPass subscription fees and customer orders, would likely hit the $50 billion mark this year, a modest increase from its prior forecast but solid enough in the face of changing consumer habits in a post-pandemic economy.
The boost followed a wider-than-expected first quarter loss of 48 cents per share for the three months ending in March, with revenues rising 35% from last year to a Street-beating $1.5 billion. Gross order volumes for the quarter were up 25% from last year to $12.4 billion, with a second quarter forecast of between $12.1 billion and $12.5 billion.
"Just as consumers are exhibiting the behavior where they're going back inside restaurants and seeing friends again and families again and eating together, and they're also ordering delivery at the same time," CEO Tony Xu told investors on a conference call late Thursday. "Restaurants are noticing that, too."
DoorDash shares were marked 10.6% lower in early Friday trading to change hands at $65.37 each, a move that would still leave the stock with a year-to-date decline of around 54%.
DoorDash's near-term confidence represented a sharp contrast to the muted outlooks from consumer facing tech companies this week, particularly Uber Technologies (UBER) and Lyft (LYFT), which suffered heavy post-earnings losses amid rising costs and slowing active user growth.
The same is true for online-focused retailers Shopify (SHOP) and eBay (EBAY), both of which forecast weakening e-commerce growth amid a massive shift in consumer habits heading into the first summer since 2019 that won't be affected by pandemic restrictions.
"Simply put, we believe DoorDash’s offering of selection, convenience, and value is resonating with consumers and we expect delivery (especially with work from home) will be a persistent trend that lasts beyond the pandemic," said JMP Securities analyst Andrew Boone, who carries a 'market outperform' rating with a $200 price target on the stock.
"While DoorDash used this report to message that it has multiple investment opportunities and expects to continue to focus on growth given the size of the local commerce opportunity, its core restaurant business has expanding margins and can fund growth," he added.
