Doordash stock rallies as investment cycle starts showing signs of a payoff

Core Viewpoint - Doordash's stock experienced a rally despite disappointing fourth-quarter results, as Wall Street recognized early progress in the company's investment cycle [1][2]. Group 1: Financial Performance - The company reported earnings that fell short of Wall Street's expectations on both revenue and profit, leading to an initial drop of about 10% in shares during extended trading [1]. - Doordash anticipates a $20 million impact from recent U.S. winter storms and increased order costs due to investments in longer-distance deliveries and cost increases in regulated markets [2]. Group 2: Investment Strategy - The company is expected to continue investing in Deliveroo, the British delivery platform acquired last year, which is projected to negatively impact adjusted EBITDA in the first quarter [2]. - Analysts noted that Doordash's investments are beginning to show signs of early payoff, contributing to a positive outlook despite the subpar results [2]. Group 3: Analyst Insights - Morgan Stanley analyst Brian Nowak highlighted that Doordash's businesses are strong and accelerating, with improving unit economics that support durable growth and further investment [3].