As the demand prediction exceeds expectations, DoorDash’s stock rises.

As it expands its network of grocery stores to support its primary restaurant business, food delivery service DoorDash Inc. predicted on Tuesday that a key demand statistic would surpass Wall Street’s projections for the first quarter.

During after-hours trading, DoorDash’s stock (DASH) was up over 7%.

“The marketplace gross order value, or the total dollar value of orders made on the platform, is expected to be between $22.6 billion and $23 billion in the current first quarter,” the firm, which delivers meals from restaurants and other things from shops, stated. According to a FactSet survey, analysts anticipated $22.41 billion.

DoorDash’s earnings for the fourth quarter were 33 cents per share. Revenue reached $2.9 billion, a 25% year-over-year rise. At $21.3 billion, the gross order value increased 21% from the previous year.

According to a FactSet survey of analysts, DoorDash projected fourth-quarter earnings per share of 34 cents on revenues of $2.84 billion and a gross order value of $20.93 billion.

“Entering 2025, we plan to continue to focus on creating incremental improvements in operational efficiency and reinvesting back into the business to increase our scale and expand our long-term profit potential,” management stated in the statement of earnings. “We believe we have clear pathways for investment in several areas of our business that we believe will allow us to generate strong returns and compound our value and impact.”

“At the same time, the total scope of local commerce is still well beyond what we serve today and we are exploring a number of new initiatives that we hope will develop into valuable services for consumers, merchants, and Dashers,” the business stated.

Larger food stores like Wegmans and other major retail companies including Home Depot Inc. (HD) have been receiving deliveries from DoorDash. This growth has coincided with a surge in consumer price hikes, especially at restaurants, which are the mainstay of DoorDash’s operations.

During DoorDash’s October earnings call, CEO Tony Xu stated that once consumers became accustomed to using the app to get groceries, they tended to place larger orders each time. Chief Financial Officer Ravi Inukonda stated in October that the company’s restaurant division growth “has actually been very stable for the last few quarters.”

Mizuho analysts predicted an easier environment for DoorDash and other gig-economy platforms ahead of the outcome.

“Industry data suggests gig-economy services demand should remain resilient with moderating inflation and continued favorable unit economics,” they stated. “We expect gig-category leaders in ride-sharing (UBER), food delivery (DASH) and grocery delivery [Instacart] to be well positioned for share gains.”

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