DoorDash's Stock Dives 10% as Growth Reinvestment Overshadows Earnings Beat

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DoorDash (DASH) shares plummeted over 10% in after-hours trading on Nov. 5, 2025, after the food delivery giant reported third-quarter earnings that missed expectations despite strong revenue growth. The stock's decline underscored investor concerns over management's plans to ramp up spending in 2026 and a revised outlook for Deliveroo's earnings contribution, according to a TS2 article.

The company reported Q3 revenue of $3.45 billion, surpassing the $3.36 billion consensus estimate, according to a Blockonomi article, driven by a 25% year-over-year increase in marketplace gross order value (GOV) to $25.0 billion, as shown in a TS2 recap. Total orders rose 21% year-over-year to 776 million, per an IndexBox report, and adjusted EBITDA hit $754 million, up 41% from the prior year, according to a Seeking Alpha note. However, earnings per share (EPS) came in at $0.55, lagging the $0.68–$0.69 forecast in a Morningstar report.

The earnings miss was compounded by management's guidance for increased 2026 investment. DoorDash signaled plans to spend "several hundred million dollars more" next year on platform development and new initiatives, including AI-driven tools, according to an Investing.com piece. This shift, coupled with a revised accounting framework for its recently acquired Deliveroo, reduced the UK delivery service's projected 2026 adjusted EBITDA contribution by $32–$40 million, per a Bloomberg article. Deliveroo is expected to add $200 million to EBITDA in 2026, though this figure is below initial estimates in a Blockchain.news post.

Investor sentiment worsened after the company raised Q4 2025 GOV guidance to $28.9–$29.5 billion but cut adjusted EBITDA expectations to $710–$810 million, as noted in a TradingView roundup. While the holiday-quarter outlook exceeded analyst forecasts, the reinvestment plans overshadowed positive momentum. "We wish there was a way to grow a baby into an adult without investment," DoorDash stated in its earnings release, highlighting the trade-off between near-term profitability and long-term growth.

Analysts reacted swiftly. Wells Fargo slashed its price target for DASH to $239 from $301, citing reduced 2026 EBITDA forecasts. UBS and Stifel also lowered their targets, though the stock retained a "Moderate Buy" consensus among 31 analysts, with an average price target of $311.86. Despite the sell-off, DoorDash's balance sheet remained strong, with $723 million in free cash flow generated in Q3.

The stock's drop followed a 42% year-to-date gain, amplifying sensitivity to profit-taking and reinvestment concerns. Management's upcoming earnings call at 5:00 p.m. ET on Nov. 5 will likely determine short-term trading dynamics, with investors scrutinizing details on capital allocation, Deliveroo integration, and holiday demand.

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