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Can DoorDash's Q3 Earnings Beat and FY24 View Push the Stock Higher?
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DoorDash (DASH - Free Report) reported earnings of 38 cents per share in third-quarter 2024 in contrast to the year-ago quarter’s loss of 19 cents. The figure beat the Zacks Consensus Estimate by 80.95%.
Revenues increased 25% year over year to $2.16 billion and surpassed the consensus mark by 1.59%. The upside was driven by strong performance in total orders and Marketplace Gross Order Value (GOV), alongside enhanced logistics efficiency and an increased contribution from advertising.
DASH’s Quarter in Details
In the third quarter, total orders increased 18% year over year to 643 million. The figure beat the Zacks Consensus Estimate by 0.62%.
Marketplace GOV increased 19% year over year to $20 billion. The figure beat the consensus estimate by 1.43%.
The adjusted gross margin was 50.9% compared with 48.7% in the year-ago quarter.
The contribution margin was 34.4% compared with 29.6% in the year-ago quarter.
Adjusted sales & marketing expenses rose 8.2% year over year to $447 million.
Adjusted research & development expenses increased 23.8% year over year to $156 million.
Adjusted general & administrative expenses increased 41.8% from the year-ago quarter’s level to $241 million.
Adjusted EBITDA was $533 million compared with the year-ago quarter’s adjusted EBITDA of $344 million.
DASH’s Balance Sheet and Cash Flow
As of Sept. 30, 2024, DoorDash had $4.96 billion in cash and cash equivalents and short-term marketable securities compared with $4.85 billion as of June 30, 2024.
Cash flow from operations was $531 million in the third quarter compared with the second-quarter cash flow of $530 million.
Free cash flow was $444 million, lower than the second quarter’s figure of $451 million.
DASH Provides Q4 Guidance
For the fourth quarter, DoorDash anticipates Marketplace GOV to be in the range of $20.6-$21 billion.
Adjusted EBITDA is expected to be in the range of $525-$575 million.
Conclusion
The company’s shares have gained 57% year to date compared with the Zacks Computer & Technology sector’s 27.6% growth. The outperformance can be attributed to strong performance in total orders and Marketplace GOV.
However, the company faces intense competition in the largest category of its business, the local food delivery logistics, which has been a headwind.
DASH currently carries Zacks Rank #3 (Hold), suggesting that it might be wise to wait for a more favorable entry point in the stock.
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Can DoorDash's Q3 Earnings Beat and FY24 View Push the Stock Higher?
DoorDash (DASH - Free Report) reported earnings of 38 cents per share in third-quarter 2024 in contrast to the year-ago quarter’s loss of 19 cents. The figure beat the Zacks Consensus Estimate by 80.95%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Revenues increased 25% year over year to $2.16 billion and surpassed the consensus mark by 1.59%. The upside was driven by strong performance in total orders and Marketplace Gross Order Value (GOV), alongside enhanced logistics efficiency and an increased contribution from advertising.
DASH’s Quarter in Details
In the third quarter, total orders increased 18% year over year to 643 million. The figure beat the Zacks Consensus Estimate by 0.62%.
DoorDash, Inc. Price, Consensus and EPS Surprise
DoorDash, Inc. price-consensus-eps-surprise-chart | DoorDash, Inc. Quote
Marketplace GOV increased 19% year over year to $20 billion. The figure beat the consensus estimate by 1.43%.
The adjusted gross margin was 50.9% compared with 48.7% in the year-ago quarter.
The contribution margin was 34.4% compared with 29.6% in the year-ago quarter.
Adjusted sales & marketing expenses rose 8.2% year over year to $447 million.
Adjusted research & development expenses increased 23.8% year over year to $156 million.
Adjusted general & administrative expenses increased 41.8% from the year-ago quarter’s level to $241 million.
Adjusted EBITDA was $533 million compared with the year-ago quarter’s adjusted EBITDA of $344 million.
DASH’s Balance Sheet and Cash Flow
As of Sept. 30, 2024, DoorDash had $4.96 billion in cash and cash equivalents and short-term marketable securities compared with $4.85 billion as of June 30, 2024.
Cash flow from operations was $531 million in the third quarter compared with the second-quarter cash flow of $530 million.
Free cash flow was $444 million, lower than the second quarter’s figure of $451 million.
DASH Provides Q4 Guidance
For the fourth quarter, DoorDash anticipates Marketplace GOV to be in the range of $20.6-$21 billion.
Adjusted EBITDA is expected to be in the range of $525-$575 million.
Conclusion
The company’s shares have gained 57% year to date compared with the Zacks Computer & Technology sector’s 27.6% growth. The outperformance can be attributed to strong performance in total orders and Marketplace GOV.
However, the company faces intense competition in the largest category of its business, the local food delivery logistics, which has been a headwind.
DASH currently carries Zacks Rank #3 (Hold), suggesting that it might be wise to wait for a more favorable entry point in the stock.
Stocks to Consider
Shopify (SHOP - Free Report) , Arista Networks (ANET - Free Report) and Blackline (BL - Free Report) are some better-ranked stocks that investors can consider in the broader sector. Each stock presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shopify shares have risen 2.7% year to date. SHOP is set to report its third-quarter 2024 results on Nov. 12.
Arista Networks shares have rallied 68.2% year to date. ANET is set to report its third-quarter 2024 results on Nov. 7.
Blackline shares have lost 10.1% year to date. BL is set to report its third-quarter 2024 results on Nov. 7.