Why GrubHub, Inc. Stock Jumped Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of GrubHub, (NYSE: GRUB  ) jumped more than 11% early Thursday, then settled to trade up around 5% after the online food ordering specialist released mixed second quarter results and strong forward guidance.

So what: Quarterly revenue grew 48% year over year to $60 million, which translated to net income of $2.7 million, or $0.03 per share. Meanwhile, adjusted earnings before interest, taxes, depreciation, and amortization rose 56% over the same period to $16.9 million. Analysts, on average, went into the report modeling higher earnings of $0.06 per share on lower sales of $54.7 million.

However, the market was willing to forgive the bottom-line shortfall given GrubHub's guidance, which calls for third quarter revenue in the range of $55.5 million-$57.5 million, with adjusted EBITDA of $13 million-$15 million. Analysts, for their part, were modeling Q3 sales of $54.3 million.

Now what: GrubHub's results were a mixed bag, which explains why it gave up some of its early morning gains. And the stock certainly doesn't look cheap trading around 15.5 times trailing 12-month sales and 85.6 times next year's expected earnings -- though that's not entirely uncommon for a high-growth company as it propels its operations into sustained profitability. I prefer continuing to watch GrubHub from the sidelines for now, but certainly wouldn't be surprised to see the stock move higher over the near-term.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3043383, ~/Articles/ArticleHandler.aspx, 9/4/2015 11:48:41 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Steve Symington

Technology and consumer goods specialist for the Fool. Steve looks for responsible businesses which positively shape our lives. Then, he invests accordingly. Enjoy his work? Connect with him on Twitter & Facebook so you don't miss a thing.

Today's Market

updated 2 hours ago Sponsored by:
DOW 16,102.38 -272.38 -1.66%
S&P 500 1,921.22 -29.91 -1.53%
NASD 4,683.92 -49.58 -1.05%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/4/2015 4:01 PM
GRUB $26.45 Down -0.46 -1.71%
Grubhub CAPS Rating: **