DoorDash (DASH) reported a GAAP loss of 39 cents per share in the fourth quarter of 2023, a significant improvement over the year-ago quarter’s loss of $1.65 per share. However, the figure missed the Zacks Consensus Estimate by 160%.
The food delivery company saw a 27% year-over-year increase in revenues, reaching $2.303 billion, which beat the consensus mark by 2.62%. This impressive performance was driven by robust growth in total orders and Marketplace Gross Order Value (GOV), as well as improved logistics efficiency and a higher contribution from advertising.
Market reaction has been positive, with the company’s shares climbing 18.6% year to date, outperforming the Zacks Computer & Technology sector’s 9.2% increase.
Details of the Quarter
In the fourth quarter of 2023, DoorDash experienced a 23% year-over-year increase in total orders, amounting to 574 million. Additionally, Marketplace GOV surged 22% year over year to $17.6 billion. The company’s adjusted gross margin stood at 48.5%, up from 46.4% in the year-ago quarter, while the contribution margin rose to 29.9% from 24.6%.
Adjusted EBITDA for the quarter was $363 million, a sharp increase from the year-ago figure of $117 million. DoorDash also showcased a robust balance sheet, with $4.07 billion in cash and cash equivalents as of December 31, 2023, compared to $3.82 billion as of September 30, 2023.
Guidance and Outlook
Looking ahead, DoorDash anticipates Marketplace GOV to range between $18.5 billion and $18.9 billion in the first quarter of 2024. The company also expects adjusted EBITDA to be in the range of $320 million to $380 million.
Analyst’s Recommendation
DoorDash currently holds a Zacks Rank #3 (Hold). Some of the other stocks in the broader technology sector, such as Dell Technologies, Inseego, and HP, are currently rated a Zacks Rank #2 (Buy).
It’s important for investors to stay updated with the latest recommendations in the turbulent stock market. According to recent Zacks reports, Dell Technologies, Inseego, and HP have all shown positive year-to-date performance, with each set to report their quarterly results in the upcoming weeks.
The financial picture for DoorDash is mixed, and the company still faces challenges to achieve consistent profitability. It will be interesting to see how DoorDash navigates these complexities in the future.
