DoorDash Q4 Results: Growth Surges Despite Financial Misses, Reviving Market Confidence

What happened

After Q3 2025, DoorDash faced investor skepticism as management flagged a higher investment cycle for European market penetration and a tech overhaul, leading to market concerns about near-term margins. The company's Q4 2025 earnings report missed both revenue and profit expectations, but operational metrics showed robust growth with total orders up 32% and Gross Order Value (GOV) up 39% year-over-year, outpacing forecasts. This strong order volume fueled a post-earnings stock rebound, as investors looked beyond short-term financial misses to potential long-term payoffs from the investment cycle. However, the DeepValue report cautions that DoorDash's valuation hinges on advertising monetization offsetting regulatory labor cost inflation without damaging order volume, a risk highlighted by the upcoming NYC pay increase to $22.13/hour in April 2026. The Q4 performance reinforces the growth narrative but does not address margin durability or the success of the 2026 investment ramp, keeping key uncertainties intact.

Implication

DoorDash's Q4 order surge demonstrates demand resilience and supports the growth side of the investment thesis, but financial misses underscore the cost of funding its aggressive 2026 investment plan. The company must now prove that this spending, aimed at tech upgrades and European expansion, translates into sustainable margin improvement through advertising monetization and operational efficiency. Near-term catalysts, such as the April 2026 NYC pay hike, will test DoorDash's ability to pass on higher labor costs without triggering order volume declines, a risk management explicitly warns about in filings. Until Net Revenue Margin stability above 13.8% is confirmed amidst rising costs, the stock's high valuation—with a P/E of 79.7x and EV/EBITDA of 132.1x—offers limited margin of safety. Therefore, maintaining a WAIT rating is prudent, with investors monitoring margin trends and regulatory outcomes over the next 3-6 months before reconsidering exposure.

Thesis delta

The Q4 results do not materially shift the DeepValue thesis, which already priced in sustained order growth alongside a significant 2026 investment ramp of 'several hundred million dollars more' than 2025. However, the stronger-than-expected order growth provides positive momentum for the growth narrative, but the financial misses and lack of disclosed margin data reinforce the need for caution on profitability durability. The thesis remains unchanged: key to upgrading the call is seeing Net Revenue Margin hold ≥13.8% despite the investment cycle, with the NYC pay increase in April 2026 serving as a critical test for fee pass-through and volume impact.