GrubHub Investors' Growth Expectations Have Gotten A Little Ahead Of Themselves

Shares of GrubHub Inc GRUB have lost nearly 20 percent since their 52-week high of roughly $45 in late September, even though the company posted decent Q3 results and boasts strong fundamentals. Over the same period, the S&P 500 slipped less than 1 percent.

GrubHub's stock’s recent performance seems to have “more to do with investors' growth expectations getting ahead of themselves than anything being wrong with the company fundamentally,” Stifel analysts John Egbert, Scott Devitt and D. Logan Thomas explained in a report issued Monday.

In fact, the company has displayed robust execution in its core marketplace business and remarkable growth in its emerging delivery segment. Meanwhile, competition does not seem to be impacting materially on its results.

With the stock trading at less than 16 times 2017 EV / EBITDA, Stifel experts believe the risk-reward profile in GrubHub shares seems compelling again, especially for long-term investors.

The firm upgraded shares of GrubHub to Buy , leaving their 12-month target price of $46 unchanged.