Northland Bullish On GrubHub,Initiates Outperform

Late Tuesday Northland Capital initiated on GrubHub GRUB at Outperform with a $40 PT.  Analyst Jeff Houston notes "several opportunities" exists to increase Total Addressable Market (TAM) and add to their growth momentum. GrubHub stands to gain from it's '"compelling" services by increasing demand "that was non-existent through the traditional alternative."
Recent investor worry over the impact to profitability due to investment in delivery services may blow over as "initiatives to reaccelerate profitability" improves over time.

Northland says the only competitive threat was Seamless and that was acquired by GrubHub in Q3 2013 so there appears to be smooth sailing ahead provided GrubHub can execute its plan.  LiveSocial attempted to enter GrubHub's market but failed and Northland views this as evidence of GrubHub's deep competitive moat.

Northland also sees GrubHub as being a potential acquisition target first by Uber then perhaps Google GOOG, TripAdvisor TRIP or Priceline PCLN.