Please ensure Javascript is enabled for purposes of website accessibility

Why Waitr Holdings Stock Sank Friday

By Howard Smith - May 7, 2021 at 2:54PM

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

Investors don't appear to be satisfied with the growth rate after the company reported first-quarter financial results.

What happened

Food delivery service Waitr Holdings (WTRH 0.76%) reported earnings Thursday evening, and investors weren't overly happy with the company's bottom-line results. As of 2 p.m. EDT Friday, its shares traded down 15% versus Thursday's closing price. 

So what

The company's bottom line didn't change from the same period one year ago, with a loss of $0.03 per share. Even once Waitr adjusted results to remove some one-time and nonrecurring items, an adjusted net income of $0.01 per share missed analyst estimates of $0.02. 

Food delivery driver ringing a doorbell in a hallway

Image source: Getty Images.

Now what

Waitr's revenue increased 15% compared with the prior-year period, and the company completed the acquisition of Florida-based Delivery Dudes during the first quarter. Waitr Chairman and CEO Carl Grimstad said in a statement, "We are pleased with our financial results for the first quarter of 2021, as we continued to grow our revenue and generate positive operating cash flow." 

But investors weren't as pleased. Active diners remained at 2 million as of March 31, 2021, unchanged from three months prior. And average daily orders declined by almost 4% compared with the average for the full year 2020. 

Waitr was founded in 2013 and has focused on underserved delivery markets, tying consumers' food demand with local restaurants. In March 2021, the company announced it will be partnering with payment processing company Flow Payments to create a cannabis delivery and payment processing service for legal marijuana dispensaries. Investors aren't happy with results from the current business model. Unless or until a catalyst arrives from the cannabis sector, investors may not see a meaningful recovery in the stock. 

Howard Smith 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Waitr Holdings Inc. Stock Quote
Waitr Holdings Inc.
$0.37 (0.76%) $0.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

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