Can DoorDash Stock Turn Around an Ugly Couple of Months?

The stock just came off its third-straight monthly loss

Digital Content Manager
Nov 3, 2022 at 2:20 PM
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DoorDash Inc (NYSE:DASH) is gearing up for its third-quarter earnings report, due out after the close this evening, Nov. 3. While the equity is running higher ahead of the event, last seen up 3.9% at $46.86 as it eyes its first close above the 20-day moving average since mid-September, things have been ugly for the food delivery name. On Monday, the equity fell back within a chip shot of its Oct. 24 record low of $41.36, after YipitData released data showing DoorDash saw a drop in orders from July through September. 

dash nov 3

While the equity has put a tiny bit of distance between its current levels and these lows, it still sits at a 68.2% year-to-date deficit, and logged its third-straight monthly drop in October. Looking at this dismal technical setup ahead of a key earnings report poses the question - can DASH turn its luck around following tonight's quarterly confessional? 

History is giving us a resounding "maybe," as DoorDash stock does have a mostly positive post-earnings past. In fact, it enjoyed five consecutive next-day wins since its first report as a publicly traded company in February 2021. However, it suffered a negative return during its August and May 2022 reports, indicating that the equity's win streak might be over. Regardless of direction, DASH has averaged a 7.5% post-earnings swing since going public, which is much smaller than the 20.2% move options players are pricing in this time around. 

Speaking of, these traders have been more bearish than usual ahead of the event. At the  International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security sports a 10-day put/call volume ratio of 1.91, which stands higher than 79% of readings from the past year. In other words, puts have been especially popular during the last two weeks. 

Short sellers have also been piling on the equity. Short interest is up 20.9% in the last reporting period, and now makes up 6.4% of the stock's available float, or nearly a week's worth of pent-up buying power. 

 

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