Please ensure Javascript is enabled for purposes of website accessibility

Why GrubHub Inc. Stock Surged Today

By Jeremy Bowman – Apr 27, 2017 at 12:17PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the restaurant delivery specialist jumped after a blowout earnings report. Here's what you need to know.

What happened

Shares of GrubHub Inc. (GRUB) were surging today after the restaurant delivery expert posted a blockbuster first-quarter earnings report.

As of 11:08 a.m. EDT, the stock was up 18.9%.

A man orders takeout on his laptop.

Image source: Getty Images.

So what

The nation's leading takeout marketplace beat estimates on top and bottom lines as revenue jumped 39%, to $156.1 million, and adjusted earnings per share improved from $0.20 a year ago to $0.29. Analysts had expected revenue of $153 million and $0.24 in EPS.

CEO Matt Maloney said, "More new diners tried Grubhub than ever before," as active diners increased 26%, to 8.75 million, in the quarter, accelerating from 21% the quarter before. He added, "We are seeing clear signs of success from a more diverse restaurant base, broader marketing reach, and continuous improvement of our product."

Now what

Looking ahead, the parent of delivery sites like Seamless and MenuPages lifted its full-year revenue guidance from $620 million-$660 million to $632 million-$662 million; consensus expectations are for revenue to come in at $644.3 million. The company also raised the bottom end of its adjusted full-year EBITDA range from $165 million to $170 million.

As more Americans demand convenience and turn to their smartphones for things like ordering dinner, GrubHub should have a long runway of growth ahead of it. The company is executing on all levels, and the stock should continue to move higher as it grows its user base and gains operating leverage.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.