Stifel Initiates Coverage On GrubHub On Compelling Opportunity

In a report published Friday, Stifel analyst John Egbert initiated coverage on

with a Buy rating and $46.00 price target. In the report, Stifel noted, “We are initiating coverage of GrubHub with a Buy rating and $46 price target. We view GrubHub as one of the most compelling small- to mid-cap companies in the Internet sector today, as its high-quality consumer product targets an $8B-$10B potential opportunity in a winner-take-most online takeout market with strong competitive barriers to scale. GrubHub operates a high-margin business with attractive working capital dynamics at a time when many young Internet companies are struggling to reach sustained profitability. GrubHub currently trades at 20x 2016E EV / EBITDA and our target represents a 26x multiple.” GrubHub closed on Thursday at $36.82.