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Why Grubhub Stock Gained 16% in July

By Demitri Kalogeropoulos – Updated Aug 3, 2018 at 2:22PM

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Investors were happy with the food ordering platform's latest earnings results.

What happened

Grubhub (GRUB) shares beat the market last month by gaining 16% compared to a 3.6% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

^SPX Chart

^SPX data by YCharts.

The boost has added to a good year for owners of the leading mobile food ordering platform as the stock has risen more than 70% so far in 2018.

So what

Investors cheered Grubhub's second-quarter earnings report, which included strong growth on both the top and bottom lines. Sales spiked 51% to $240 million as the company added 5.4 million active users to its customer base. That increase powered 39% higher food sales overall. Net income doubled to $30 million, or $0.33 per share, from $15 million, or $0.17 per share, a year ago.

A customer orders food on a smartphone.

Image source: Getty Images.

"We had a standout quarter," CEO Matt Maloney said in a press release, "highlighted by a record number of new diners trying Grubhub for the first time." 

Now what

Maloney and his team recently made one of their biggest acquisitions yet by purchasing LevelUp for $390 million in cash. Executives are hoping the payments specialist will help it integrate its system with major restaurant chains like KFC and Taco Bell. In the meantime, continued interest on the part of diners for home delivery should push sales up to between $966 million and $983 million in 2018, up from $683 million last year.

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

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