DoorDash’s Uptrend Is Gaining Momentum in 2025

Key Points

• DoorDash had a solid quarter despite falling short of the analysts' high bar.
• Profitability improves as scale is gained, and new acquisitions will accelerate growth.
• Cash flow supports a robust capital return that aggressively reduces the share count. 

DoorDash’s NASDAQ: DASH stock price faces hurdles and headwinds, including high expectations among analysts and a spike in short interest, but it is in an uptrend and gaining momentum.

The Q1 results fell short of MarketBeat’s reported consensus for FQ1 2025, but revenue is up nearly 21% compared to the prior year, driving positive cash flow for the business. 

Among the takeaways from the report and conference call are the resilient nature of the business, seemingly unimpacted by macroeconomic headwinds, as demand remains strong. Management noted no changes in consumer habits, only positive metrics pointing to sustained growth and profitability.

The only negative is a note of caution in the outlook caused by the uncertain macroeconomic environment and potentially negative impact on consumption. 

New Acquisitions Drive Scale and Leverage for DoorDash

Recent acquisitions are a catalyst and a concern for analysts. The catalyst is obvious: growth; the problem is profitability. Analysts expressed concern following the Q1 release, casting doubt about near-term profitability as the integrations are made.

However, company CEO Tony Xu expressed great confidence, stating that the increasing scale and focus on retention and order growth will help drive profitability over time. Investors should focus on the company’s increasing scale, expanding addressable markets, deepening penetration, and track record for improving profitability.  

Deliveroo and SevenRooms are new acquisitions expected to close later this year. SevenRooms is a CRM platform for the hospitality industry, providing various services, including reservation management and customer data management, for restaurants and hotels.

Deliveroo is the more interesting acquisition, adding 7 million unique active members to the network and expanding the company’s reach in the UK and EU. Deliveroo reached its first full year of profitability in 2024 and is growing at a high-single-digit pace in 2025. 

Analysts Raise Price Targets for DoorDash in Q2

The analysts expressed concern following DoorDash’s release, and some reduced their price targets, but most reductions were to levels above the consensus. More analysts lifted targets than lowered, and the impact on the consensus was that it increased. It forecasts a modest 16% upside for this stock, and there is potential for a move into the high-end range later this year.

The earnings report is the likely catalyst, assuming consumer habits remain solid. If not, DoorDash stock won’t be the only one to fall as the broad market re-enters correction and potentially moves to a fresh low.  

DoorDash Earnings Quality Improves in Q1

DoorDash had a solid quarter in Q1 despite falling short of the high bar set by analysts. The $3.03 billion in net revenue is nearly 200 basis points shy of the consensus but up 20.7% compared to the prior year. The gains are driven by strength in orders, up 18%, and a 20% increase in Marketplace GOV, or the total of all dollar value crossing the platform. Mix also played an important role, with 25% of active users ordering groceries, a recurring revenue stream for the business. 

The margin news is good. The company sustained its margin despite acquisitions and investments made during the quarter, leaving the net results well above the consensus estimate. The net income grew to $192 million versus a loss posted last year, with adjusted EPS of $0.44, a nickel ahead of forecasts, and in alignment with the capital return outlook.

The company has been aggressively buying back its shares and announced an additional $5 billion authorization earlier this year. The company did not buy shares during the quarter but will likely do so as the year progresses, aiding the updraft in share price action. As it is, the share count at the end of Q1 is down nearly 7%.