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.
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.
