Delivery Hero SE shares plunged more than 8% Friday after its majority-owned unit Talabat Holding Plc slashed its 2026 outlook. The guidance indicated tighter margins and heavier investment spending, sending investors fleeing from the food delivery giant's stock.

Talabat revealed plans to allocate $150 million for investments in 2026, including $50 million in food and $100 million to expand dark stores and subscription programs. The company projected 2026 adjusted EBITDA of $510-540 million, representing margins of just 4.4-4.8%, down from 6.5% in 2025.

Morgan Stanley analysts noted intensified competition in UAE, Qatar, and Kuwait, where regulations may prevent food-delivery platforms from charging below cost. Despite the gloomy outlook, the brokerage maintains an "overweight" rating on Talabat, valuing the company using discounted cash flow and free cash flow yield methodologies.

The market reaction reflects growing concerns over profitability in the food delivery sector. Talabat's decision to prioritize growth over margins signals a strategic shift that could pressure Delivery Hero's financial performance until competitive dynamics stabilize across the Middle East markets where the company operates.