Stock (Symbol) |
Grubhub (GRUB) |
Stock Price |
$55 |
Sector |
| Food & Necessities |
Data is as of |
| August 29, 2017 |
Expected to Report |
| Oct 24 |
Company Description |
 Grubhub Inc. provides an online and mobile platform for restaurant pick-up and delivery orders. Its products include Grubhub and Seamless Mobile Applications and Mobile Website, Grubhub and Seamless Websites, Corporate Program, Delivery, Allmenus and MenuPages, Grubhub for Restaurants, and Restaurant Websites. As of December 31, 2016, the Company connected more than 50,000 local restaurants with diners in more than 1,100 cities across the United States. The Company provides diners on the platform with a personalized platform that helps them search for local restaurants and then place an order from an Internet-connected device. It also provides diners with information about their orders and status. Source: Thomson Financial. |
Sharek’s Take |
 Grubhub (GRUB) operates food ordering apps such as Grubhub, Seamless and the recently acquired Fooder, which is outa Boston. Grubhub has more than 50,000 restaurants on its app in more than 1100 U.S. cities serving 9 million customers. has been doing deals lately. The stock caught my attention late last year, but I decided not to follow it after the company’s CEO started bashing Donald Trump (which is essentially insulting Republicans and half the country as well). But me not owning GRUB was a mistake as the stock has battled higher (albeit on slowing profit growth). Grubhub has been doing a lot of deals this year. In addition to Fooder it just announced a partnership with Groupon to be the exclusive partner on its food ordering platform. In addition, GRUB acquired Yelp’s Eat24 online ordering business. Grubhub will also be the preferred ordering partner on the Yelp platform. I like this stock overall, and the Estimated Long-Term Growth Rate of 23% fits the bill, but with a P/E of 50 I’m looking to get in at a lower level, perhaps the low-$40s. |
One Year Chart |
 Last qtr GRUB delivered sales growth of 32% but profits grew just 13% and met analyst estimates. Food sales increased 20% in the qtr. This is my first qtr covering GRUB so I don’t know if estimates increased or not. Qtrly profit growth Estimates are 4%, 30%, 17% and 19%., which doesn’t impress me — especially since GRUB didn’t beat the street last qtr. The stock is also up on the idea Amazon would be interested in acquiring the company, but that’s just a rumor. Nice Est. LTG of 23% a year, but paying 50x earnings is a little much. |
Fair Value |
 Like many young guns, GRUB has been growing profits as its P/E has been on the decline. Until recently, when the P/E shot back to 50. My Fair Value is a P/E of 38 which is a stock price of $42. I feel GRUB is overvalued. |
Bottom Line |
 Grubhub has established itself as the premier app for ordering food and having it delivered from restaurants. Just last qtr it inked deals to bring QDOBA, Del Taco, Jack in the Box, Moe’s, Darden’s, Papa Murphy’s, Le Pain, Famous Dave’s and Capital Grille onto the platform. And with the Groupon and Yelp deals the future here is bright. My concerns are (1) the stock is high and in my opinion overpriced and (2) this technology could be copied by a big tech juggernaut looking to get into the food delivery business. GRUB is on my radar for the Growth Portfolio and I’ll be looking to buy in the low-$40s. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
