By Senad Karaahmetovic
Shares of DoorDash (NYSE:DASH) are up over 12% in pre-market trading after the company offered better-than-feared guidance for the fourth quarter.
DASH reported a loss per share of $0.77 on revenue of $1.7 billion while analysts were expecting a loss per share of $0.55 on revenue of $1.62 billion. Revenue soared 33% year-over-year while orders were +27% to $439 million.
Marketplace gross order value was $13.53 billion, beating the consensus by $400 million. Shares were also boosted by strong free cash flow generation - $99 million vs $34.7 million expected.
For this quarter, DASH said it expects the adjusted EBITDA to come in between $85 million and $120 million, topping the $92.2 million estimate. The overall marketplace gross order value is seen at $14.05 billion (the midpoint), higher than the $13.6 billion consensus compiled by Bloomberg.
Citi analysts said the company's Q3 report shows "it is not experiencing macro challenges with MAUs increasing sequentially and DashPass members reaching all-time highs."
"One of the biggest debates headed into the quarter was on investments and profitability and with 3Q EBITDA of $87 million (5.1% margin on revenue) coming in 16% above the high-end of guidance and new disclosures highlighting the profitability of Dash's U.S. restaurant business, we look for margins improve going forward," the analysts said in a client note.
Raymond James analysts said the "solid" Q3 results were driven by "higher take rate & open leverage."
"While positive on the fundamental outlook, we believe risk/reward is balanced at current levels (~6x 2023E EV/GP) and thus maintain our Market Perform rating," the analysts added.