17th Feb 2022 13:41
(Alliance News) - Share prices of European peers were firm on Thursday, after US meal delivery platform DoorDash Inc late Wednesday reported higher-than-expected earnings and said it expects strong demand in 2022, despite easing pandemic restrictions.
DoorDash shares were up 22% to USD115.58 in pre-market activity in New York on Thursday.
Among European peers, Just Eat Takeaway.com NV was up 0.7% in London at 3,320.50 pence, and Deliveroo PLC was up 1.6% at 139.15p. In Frankfurt, Delivery Hero SE was up 3.0% at EUR51.16.
However, all four stocks are down over the past 12 months, as investors question whether home food order growth can be maintained now that lockdowns have ended and restaurants have reopened. DoorDash is down 52% over the past year, Just Eat Takeaway down 56%, Deliveroo down 52%, and Delivery Hero down 59%.
DoorDash booked USD1.30 billion in fourth quarter revenue, a 34% increase from USD970 million a year before. However, growth slowed to just 1.9% from the third to fourth quarters. For all of 2021, DoorDash reported revenue of USD4.89 billion, up 69% from USD2.89 billion in 2020.
While a small player in 2019, DoorDash took advantage of strong demand during the coronavirus pandemic to take up more than half of the US market, outperforming the two prior heavyweights Uber Eats and GrubHub. Uber Eats is owned by Uber Technologies Inc and GrubHub by Just Eat Takeaway.
On a conference call with investors, DoorDash Chief Financial Officer Prabir Adarkar said the company had gained even more market share in the last quarter, AFP reported.
"We continue to be the leading acquirer of all customers that come into the industry for the first time," added DoorDash Chief Executive Officer Tony Xu.
With 25 million monthly active users, DoorDash recorded USD42 billion in gross order value last year and expects a range of between USD48 billion and USD50 billion for 2022. Analysts at Davy in Dublin are more optimistic. They expect USD52.86 billion in orders this year, above market consensus of USD49.46 billion.
Davy noted that gross order value increased by 70% in 2021 as a whole but by just 36% year-on-year in the fourth quarter, showing slowing growth post-pandemic. However, the broker noted that both these increases beat the same from Deliveroo, at 67% and 33%, and Just Eat Takeaway, at 31% and 17%. Delivery Hero achieved 40% growth in orders in the fourth quarter but just 62% in 2021 as a whole, according to Davy.
DoorDash is hoping to continue advancing new meal-related delivery categories, such as alcoholic beverages and groceries. It said that 14% of active monthly users ordered something other than a meal through its platform in December.
However, the US company continues to lose money. It reported a net loss of USD155 million in the fourth quarter, narrowed from USD312 million a year before. For all of 2021, DoorDash lost USD468 million, hardly changed from its USD461 million loss in 2020.
For its part, Just Eat Takeaway said back in October that it expects 2021 to be its "peak year of losses".
Davy said it retains its 'neutral' rating on DoorDash and price target of USD155, which is 30% above the stock's current price.
By Tom Waite; [email protected]
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