DASH -13.71% After Q3 Earnings Miss and 2026 Investment Plans

On NOV 6 2025, DASH dropped by 3.96% within 24 hours to reach $100.73, DASH rose by 35.87% within 7 days, rose by 89.32% within 1 month, and rose by 164.18% within 1 year.

DoorDash Inc. (NASDAQ: DASH) delivered a mixed earnings report for Q3 2025, marked by revenue beating expectations while earnings per share fell short of consensus. The company reported revenue of $3.45 billion, surpassing the estimated $3.36 billion, but reported an EPS of $0.55, which was below the projected $0.68–$0.69 range. This divergence between top-line and bottom-line performance highlighted a key issue for investors: while revenue and growth metrics were robust, near-term profitability expectations were not met.

The company's Marketplace Gross Order Value (GOV) reached $25.0 billion, a 25% increase year-over-year, and Total Orders grew 21% to 776 million. Additionally, the net revenue margin improved to 13.8%, and adjusted EBITDA reached $754 million, both showing signs of strong operational efficiency and growth.

Despite these positive metrics, DoorDash’s stock reacted negatively after hours, with shares dropping by approximately 13.71%. The drop was attributed to the EPS miss and the company's forward-looking guidance. Management signaled a significant increase in 2026 investment plans, projecting "several hundred million dollars" in additional spending on new initiatives and platform development. This spending is expected to impact near-term profitability, raising concerns among investors about short-term margin pressures.

The acquisition of Deliveroo further complicated the earnings narrative. While it is expected to contribute $45 million to Q4 Adjusted EBITDA, the company acknowledged a reduced contribution in 2026 due to accounting alignment effects. DoorDash estimated the Deliveroo contribution for 2026 at approximately $200 million in Adjusted EBITDA, but this was trimmed by $32–$40 million compared to Deliveroo's standalone definitions. These accounting adjustments added to investor uncertainty and contributed to the post-earnings selloff.

Backtest Hypothesis

To evaluate the impact of earnings misses on share-price behavior, a backtesting strategy can be employed. This strategy focuses on analyzing how specific stocks react to earnings events, particularly when there is a significant miss in earnings per share. The methodology involves identifying earnings dates where EPS fell below consensus estimates and measuring the subsequent price movement.

For DoorDash, this approach could be applied to test how the market reacts to such events. A typical implementation would involve selecting a period, such as 2022-01-01 through today (2025-11-06), and measuring daily closing prices around the earnings event. By isolating these specific dates and comparing the price movements to the broader market, one could determine whether earnings misses consistently lead to downward pressure on stock prices.

The backtest would also consider other factors that could influence share price after an earnings miss, including the magnitude of the miss, the company's forward guidance, and the broader market sentiment. For DoorDash, the EPS miss was coupled with a significant investment announcement, which could be a critical factor in the observed price drop.