DoorDash Inc (NYSE:DASH) shares climbed after the company reported first-quarter financial results that beat Wall Street estimates handily as consumers continued to rely on online deliveries for food and household items against a backdrop of higher prices.
For the period ended March 31, 2023, the San Francisco-based food delivery company narrowed its loss to $161 million, or $0.41 cents a share, compared to a loss of $167 million, or 40.48 cents a share for 1Q 2022.
Significantly, DoorDash’s revenue grew 40% to $2.04 billion in the quarter from $1.46 billion in the comparative period a year earlier.
The consensus estimate was a loss of $0.56 per share on revenue of $1.9 billion.
Investors reacted to the news, sending DoorDash shares up 4.3% to $65.50 in the pre-market trading session.
Food-delivery companies filled a necessity during the pandemic as people stayed home to avoid contracting the virus. Their usefulness appears to have outlasted the early days of the pandemic.
Uber Technologies which reported earlier this week also cited strength in its food delivery business.
DoorDash also offered a solid forecast, guiding for adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of between $180 million and $230 million in the 2Q, above analysts’ estimates of $164.2 million.
For the full year, DoorDash said it expects adjusted EBITDA to range from $600 million to $900 million, while analysts forecast $677.8 million.
Meanwhile, analysts at Oppenheimer noted that DoorDash is benefiting from consumer strength and marketplace investments.
"Increasing target to $85 (was $80) as DASH executing on all metrics, with no sign of a consumer slowdown," analysts at Oppenheimer said in a note to clients.
"Seeing increasing cohort order frequency, stable average order value (AOV) growth and better marketing efficiency, driving EBITDA 40% above guidance."
DoorDash is a technology company that connects consumers with their favorite local and national businesses in over 4,000 cities and all 50 states across the US, Canada, and Australia.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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