DoorDash Q3 Growth Accelerates but Valuation and Risks Loom Large

What happened

DoorDash posted strong Q3 2025 results with total orders surging to 776 million and record subscription growth, highlighting robust consumer demand. This performance builds on the company's dominant U.S. market share and expanding international presence through acquisitions like Wolt and Deliveroo. Financially, the quarter saw improved profitability with GAAP net income of $244 million and Adjusted EBITDA of $754 million, reflecting better unit economics and operating leverage. However, the stock's high valuation at about 93 times trailing earnings and persistent headwinds from intense competition, regulatory scrutiny, and integration risks temper optimism. These factors reinforce a balanced outlook, as growth gains are counterbalanced by significant uncertainties that could undermine long-term returns.

Implication

The acceleration in order growth and subscription numbers underscores DoorDash's operational strength and potential for sustained cash flow generation. Yet, the stock's rich valuation leaves little margin of safety, pricing in perfection and increasing vulnerability to any growth deceleration or margin pressure. Regulatory overhangs, such as potential gig-worker reclassification, could abruptly raise costs and disrupt the business model, while fierce competition from rivals like Uber Eats threatens market share and profitability. Integration challenges with recent acquisitions add execution risk, potentially diluting returns if synergies are not realized. Consequently, investors are better off waiting for a more attractive entry point or clearer evidence that risks are abating before increasing exposure.

Thesis delta

The Q3 results strengthen the growth narrative by confirming robust order and subscription trends, aligning with the positive aspects of DoorDash's scaling story. However, this does not mitigate the core concerns of overvaluation and persistent regulatory and competitive pressures, which keep the investment thesis in a 'WAIT' stance. No material shift is warranted, as the risks continue to outweigh the near-term growth improvements.