DASH +8.75% Daily: Earnings Miss and 2026 Reinvestment Plans Weigh on Investor Sentiment

On NOV 7 2025, DASH rose by 8.75% within 24 hours to reach $122.59, DASH rose by 37% within 7 days, rose by 132.19% within 1 month, and rose by 224% within 1 year.

DoorDash Inc. (DASH) reported third-quarter 2025 earnings of $0.55 per share, missing the Zacks Consensus Estimate by 19.12%. While revenue increased by 27.3% year over year to $3.45 billion—surpassing the consensus estimate by 2.41%—the earnings shortfall led to a sharp sell-off in the stock. Following the results, DASH shares fell nearly 10% in pre-market trading, with some reports citing a drop of up to 17.2% intraday.

The company processed 776 million orders in the quarter, a 21% increase year over year, and reported a 25% rise in marketplace gross order value (GOV) to $25 billion. Despite these top-line gains, investors reacted negatively to management’s acknowledgment of rising costs and expenses, which increased 23% to $3.19 billion due to ongoing investments in new initiatives such as delivery robots and the integration of its recent acquisition of Deliveroo.

DoorDash announced its intention to reinvest heavily in 2026, committing “several hundred million dollars more” than in 2025. This includes scaling its autonomous delivery fleet, launching AI-powered tools, and expanding its global tech stack. CEO Tony Xu emphasized the company’s long-term growth strategy, stating that reinvestment is necessary for innovation and sustainability in a competitive market.

The announcement was met with skepticism by Wall Street. Wells Fargo analyst Ken Gawrelski cut the price target from $301 to $239 and lowered its 2026 EBITDA forecast by 19% to $3.6 billion, well below the consensus estimate of $4.2 billion. UBS and Stifel also adjusted their price targets downward, citing concerns over margin pressure and reinvestment risks.

Despite the near-term sell-off, analysts remain cautiously optimistic about DASH’s long-term trajectory. Deutsche Bank and Oppenheimer maintained "buy" ratings, albeit with reduced price targets, while 31 analysts currently assign a "Moderate Buy" consensus rating to the stock, with an average price target of $311.86.

Backtest Hypothesis

DoorDash’s recent earnings miss and subsequent reinvestment guidance reflect a broader pattern observed in growth stocks: a short-term sell-off following a deviation from earnings expectations, often followed by a period of consolidation or eventual recovery based on the strength of the underlying business model and management’s long-term vision.

To explore this, a backtest could be conducted on stocks that reported a “miss” in their quarterly earnings, focusing on how the market responded in the following 30, 60, and 90 days. This would help determine whether a similar pattern holds true across the tech sector and if strategic reinvestment signals correlate with long-term share performance.

Such a test would require identifying a list of stocks, including DASH, with a clear earnings-miss signal between January 2022 and the present. The test would measure average return performance, volatility, and risk-adjusted metrics like Sharpe ratio, using daily closing prices as the primary price input. Optional risk controls—such as a 15% stop-loss or 30-day holding period—could be applied to simulate real-world trading conditions.