Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of GrubHub Inc. Jumped Today

By Timothy Green - Feb 4, 2016 at 4:25PM

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

The food-delivery specialist beat analyst expectations for both revenue and earnings, and its guidance was in line with expectations.

What: Shares of food-delivery company GrubHub (GRUB) jumped on Thursday following the company's fourth-quarter earnings report. GrubHub beat analyst estimates for both revenue and earnings, and the company provided in-line revenue guidance for the first quarter. At 3:20 p.m. ET, the stock was up about 11.5%.

So what: GrubHub reported quarterly revenue of $100 million, up 36% year over year and slightly higher than the average analyst estimate. Active diners totaled 6.75 million during the fourth quarter, up 34% year over year, while gross food sales rose 26% to $643 million.

GrubHub reported non-GAAP net income of $0.19 per share, up 16% year over year and $0.05 higher than analyst expectations. On a GAAP basis, EPS of $0.13 was flat year over year, with total costs rising by 48% year over year, substantially faster than revenue.

The company expects first-quarter revenue between $109 million and $112 million, in line with the average analyst estimate. Adjusted EBITDA is expected between $30 and $33 million, above analyst expectations of $28.6 million.

Now what: Shares of GrubHub have been hammered over the past year, falling nearly 50% prior to Thursday's gain. A string of mixed and negative earnings reports beginning in April of last year sent the stock tumbling.

GrubHub's growth rate has slowed, and concerns about intense competition in the food-delivery business have contributed to the stock's decline over the past year. The fourth quarter was generally positive for GrubHub, although costs are rising faster than revenue, and the number of daily average orders only grew by 19% year over year. Still, after a steep decline in the stock price over the past year, expectations are likely lower, and investors seem pleased with the company's results.

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

GrubHub Inc. Stock Quote
GrubHub Inc.
GRUB

*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
323%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/06/2022.

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.