DASH +8.75% Daily: Lower-than-expected Earnings and 2026 Reinvestment Strategy Impact Investor Confidence

As of November 7, 2025,

surged by 8.75% in a single day to hit $122.59. Over the past week, DASH climbed 37%, posted a 132.19% gain in the last month, and soared 224% over the previous year.

DoorDash Inc. (DASH) announced its third-quarter 2025 earnings at $0.55 per share, falling short of the Zacks Consensus Estimate by 19.12%. Revenue, however, jumped 27.3% year over year to $3.45 billion, beating expectations by 2.41%. Despite the revenue beat, the earnings miss triggered a steep decline in the stock price. Following the earnings release, DASH shares dropped nearly 10% in pre-market trading, with some sources noting an intraday decline of up to 17.2%.

The company handled 776 million orders during the quarter, marking a 21% year-over-year increase, and saw marketplace gross order value (GOV) rise 25% to $25 billion. Despite these strong top-line results, investors were unsettled by management’s comments on rising costs and expenses, which grew 23% to $3.19 billion due to continued investment in new projects like delivery robots and the integration of Deliveroo, its latest acquisition.

DoorDash revealed plans to significantly boost reinvestment in 2026, pledging to spend “several hundred million dollars more” than in 2025. The company aims to expand its autonomous delivery fleet, introduce AI-driven solutions, and enhance its global technology infrastructure. CEO Tony Xu highlighted that these investments are crucial for innovation and maintaining a competitive edge, underscoring the company’s focus on sustainable, long-term growth.

The announcement was met with skepticism from Wall Street. Wells Fargo analyst Ken Gawrelski lowered the price target from $301 to $239 and cut the 2026 EBITDA estimate by 19% to $3.6 billion, which is well below the consensus of $4.2 billion. UBS and Stifel also revised their price targets downward, citing worries about shrinking margins and the risks tied to increased reinvestment.

Despite the recent sell-off, analysts remain cautiously positive about DASH’s future prospects. Both Deutsche Bank and Oppenheimer kept their “buy” ratings, though they reduced their price targets. Currently, 31 analysts rate the stock as a “Moderate Buy,” with an average price target of $311.86.

Backtest Hypothesis

DoorDash’s latest earnings miss and its guidance for increased reinvestment highlight a common trend among growth companies: a short-term decline after missing earnings expectations, often followed by a period of stabilization or eventual rebound, depending on the company’s fundamentals and management’s strategic direction.

To investigate this, one could backtest stocks that reported quarterly earnings misses, analyzing market reactions over the subsequent 30, 60, and 90 days. This would help assess whether this pattern is consistent across technology stocks and if announcements of strategic reinvestment are linked to longer-term stock performance.

Such a backtest would involve compiling a list of companies, including DASH, that signaled an earnings miss from January 2022 onward. The analysis would track average returns, volatility, and risk-adjusted measures such as the Sharpe ratio, using daily closing prices as the main data input. Optional risk management strategies—like a 15% stop-loss or a 30-day holding period—could be incorporated to better reflect actual trading scenarios.