May 7 (Reuters) - Doordash shares jumped 11% in premarket trading on Thursday, as demand for its food and grocery services helped the company forecast strong total order value for the second quarter despite concerns over higher gas prices.
The delivery platform has ramped up investments in its membership programs and is stepping up coverage for grocery delivery in the U.S. as well as in international markets such as Canada in partnership with retailers such as Sobeys and Safeway.
Doordash's membership
program in the U.S. and Canada, called DashPass, costs about $9.99 per month, or $96 a year, and offers $0 delivery fees on grocery orders.
The company reported increased sign-ups for its membership programs in the first quarter, as consumers continue to value the convenience of deliveries.
Rival Uber also forecast strong second-quarter bookings, partly helped by higher-than-expected growth in its delivery segment.
"Consumer health has been under the microscope amid higher gas prices, but the impact on business performance hasn't materialized. If traffic in the Strait of Hormuz normalizes, the door to a strong 2026 opens for convenience players," Morningstar analyst Mark Giarelli said in a note.
Doordash said it attracted more new customers in its U.S. grocery business in the three months ended March 31 than in any previous quarter.
However, some analysts still struck a tone of caution as Doordash and other delivery rivals such as Instacart contend with the fallout of high fuel prices due to the war in the Middle East and provide relief programs for their drivers.
Doordash said its gas relief program would cost the company over $50 million in the current quarter. Its gross margin for the first quarter contracted to 48.2%, compared with 48.7% reported a year ago.
Its forward price-to-earnings ratio for the next 12 months, a benchmark for valuing stocks, was 52.54, compared with 15.37 for Instacart and 22.05 for Uber. Doordash's shares are down about 25% this year.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Shreya Biswas)
