DoorDash Inc.'s stock has reportedly soared 16.5% after the food-delivery business beat quarterly revenue estimates, making it a rare bright spot among pandemic darlings whose stocks have been plummeting since the results
People still prefer having their meals and other products such as groceries delivered to their doorstep, as evidenced by the company's 34% sales increase, which was a tad slower than the rapid pace reported a year ago.
If the stock maintains its gains, it will have had its greatest day in nine months and will have rebounded from a record low closing a day earlier.
According to an analyst, this sustained growth demonstrates increased customer interest and demand for delivery in non-restaurant areas, with DoorDash well-positioned to capitalize.
DoorDash, like Uber Eats and its European competitors Delivery Hero, Deliveroo, and Grubhub-owned Just Eat Takeaway.com, has seen its food-delivery platform's popularity hold steady even as eateries reopen.
A senior analyst was reportedly quoted saying that the food delivery business is here to remain, but the ones that can offer the most value for these deliveries will stand out.
To achieve a dominant position in the market, food-delivery companies have been straining their margins by seeking revenue growth through aggressive expansion. DoorDash reported a wider-than-expected loss, prompting some analysts to cut their price targets.
Other pandemic heroes, such as gaming business Roblox and e-commerce firm Shopify Inc., have been under pressure this week due to poor projections, which have been driven by more individuals returning to their pre-pandemic routines.
It is worth mentioning here that Activision Blizzard Inc. and Electronic Arts Inc. have provided gloomy outlooks for this earnings season, while Peloton Interactive Inc., a maker of exercise bikes, and Netflix Inc., have seen their stock prices plummet.