DoorDash (NASDAQ: DASH) shares tumbled more than 7% on Tuesday, erasing recent gains, after the food delivery giant posted mixed first-quarter results and unveiled two major acquisitions totaling nearly $5 billion.
The sharp decline underscores investor unease about the company’s growth trajectory and capital allocation as it doubles down on expansion in a fiercely competitive market.
Mixed Q1 Results Fuel Investor Caution
DoorDash reported first-quarter revenue of $3.03 billion, up 21% year-over-year but falling short of Wall Street’s consensus estimate of $3.10 billion. While the company delivered a positive earnings surprise-posting earnings per share of $0.44, above the expected $0.39-the revenue miss raised concerns about the pace of core business growth.
Total orders climbed 18% to 732 million, but this, too, was slightly below analyst projections, signaling that the company’s rapid expansion may be encountering headwinds.
$5 Billion Acquisition Spree Raises Eyebrows
Compounding concerns about organic growth, DoorDash announced it will acquire UK-based Deliveroo for nearly $4 billion and New York restaurant tech firm SevenRooms for $1.2 billion. These deals, aimed at expanding DoorDash’s global reach and strengthening its merchant services, represent a bold bet on international growth and platform diversification.
However, investors are wary of the risks and integration challenges that come with such large-scale acquisitions. The Deliveroo deal, in particular, positions DoorDash to compete more aggressively in Europe but also exposes the company to new regulatory and operational complexities.
Meanwhile, the SevenRooms acquisition is designed to enhance in-store and delivery sales for merchants, but the hefty price tag has prompted questions about near-term profitability and return on investment.
Guidance and Market Reaction
Looking ahead, DoorDash’s guidance for the second quarter was in line with expectations, projecting Marketplace gross order value between $23.3 billion and $23.7 billion and adjusted EBITDA between $600 million and $650 million.
Still, the company’s EBITDA outlook was at the lower end of analyst forecasts, fueling further skepticism about margin expansion in the face of rising costs and acquisition-related spending.
The market’s reaction was swift: DoorDash stock fell as much as 9.8% in early trading, marking its largest single-day drop in a year. Despite this, the stock remains up more than 10% year-to-date and has surged nearly 80% over the past 12 months, reflecting strong long-term momentum but heightened sensitivity to quarterly performance and strategic pivots.