DoorDash (NYSE:DASH) generated better-than-expected revenue in the second quarter despite rising competition in the delivery space. The company’s Q2 2023 revenue increased 33% to $2.13 billion, slightly ahead of analysts’ expectations of $2.06 billion. Shares were up 4.6% in Wednesday’s after-hours trading.
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More Details on Q2 Results
Customers still seem to be opting for food delivery despite the reopening of the economy, thanks to attractive promotions and deals. DoorDash’s orders grew 25% to 532 million in the second quarter, while Marketplace gross order volume (GOV) jumped 26% to $16.4 billion. CFO Ravi Inukonda said that order frequency hit an all-time high in the quarter.
CEO Tony Xu said that the company is growing faster than its rivals and gaining share across categories. Rival Uber Technologies (NYSE:UBER) reported about a 14% rise in its second-quarter revenue.
The company’s loss per share reduced to $0.44 compared to $0.72 in the prior-year quarter. However, analysts were expecting a lower loss per share of $0.41.
DoorDash now expects a full-year marketplace gross order volume of $64.2 billion to $65.2 billion, up from the previously issued outlook of $63 billion to $64.5 billion. The company now projects full-year adjusted EBITDA in the range of $750 million to $1.05 billion compared to the previous forecast of $600 million to $900 million.
During the Q2 conference call, CEO Xu said that the company intends to continue investing in its expansion and develop new businesses to drive long-term value.
Is DoorDash Stock a Buy?
Following the Q2 print and ahead of the earnings call, Goldman Sachs analyst Eric Sheridan said that DoorDash’s Q2 2023 results and outlook indicate that the end-demand backdrop remains solid with “no signs of consumer weakness to date.”
He also noted that management stressed that the company remains in an investment mode to ensure long-term growth. The analyst also highlighted that despite continued investments, the company raised the top end of its 2023 adjusted EBITDA guidance by $150 million, reflecting operational outperformance in the first half of the year and “elements of strong incremental margins” while producing its highest-ever quarterly GOV.
Sheridan has a Hold rating on DASH stock.
Wall Street is cautiously optimistic about DoorDash based on eight Buys, 11 Holds, and two Sells. The average price target of $78.68 implies 8.5% upside potential.
