What happened

Shares of online food delivery company Waitr Holdings (NASDAQ:WTRH) are up a big 21.5% in trading as of 11:30 a.m. EDT Wednesday.

You can thank the analysts at B. Riley FBR for that.

A hand emerges from laptop bearing a platter of food.

Image source: Getty Images.

So what

Early this morning, FBR initiated coverage of Waitr with a buy rating and an $8 price target. When you consider that Waitr closed trading at just $4 and change yesterday, that's a prediction that was bound to get some attention -- and it did. Waitr stock jumped out of the gate when trading began this morning, and it hasn't looked back since.

So what does FBR like about Waitr? For one thing, the analyst points out that Waitr's focus on serving "underserved" small and medium markets helps to ensure it enjoys No. 1 or at least No. 2 market share in many of the markets where it operates, reports TheFly.com. Incidentally, it also probably keeps Waitr out of the bull's-eye of rivals like GrubHub, Uber, and Postmates in the competition to serve the marketplace of stay-at-home eaters.

Now what

What really may be of interest to momentum traders, though, and what may explain the rapid rise in Waitr's stock price today, is FBR's prediction that Waitr would make for an attractive buyout candidate for one of these larger rivals.

The food delivery space is in the middle of a "wave of consolidation," as FBR puts it, with Just Eat Takeaway.com announcing a buyout of GrubHub for $7.3 billion last month and Uber bidding to acquire Postmates for $2.6 billion. FBR's prediction that someone will buy Waitr next might not prove prescient -- but it does seem to make sense.

And today investors are betting it will happen.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.