Barrington Research On GrubHub: 'Strong Results And Savvy Delivery Acquisitions'

Jeff Houston of Barrington Research on Thursday commented in a note that GrubHub Inc GRUB reported a strong quarterly result driven by active-diner additions, daily average Grubs, and gross food sales while mobile orders continue to represent more than 50 percent of all orders.

Houston also notes that the company's acquisition of DiningIn Restaurants on the Run for $74 million combined provides the company with delivery options for 3,000 restaurants in 15 markets. The analyst adds that "we like these deals" as it expands the addressable market by offering a plug-and-play solution to non-delivery restaurants.

Looking forward to the first quarter, Houston expects the company to report revenue of $85.2 million, an EBITDA of $108.0 million and an earnings per share of $0.13 on a GAAP basis and $0.16 on a non-GAAP basis.

Bottom line, GrubBuhb's meaningful first advantage, a highly profitable business model, pricing power, an innovative management team and Board and significant operating-metric momentum justifies the analyst maintaining an Outperform rating with a price target raised to $48 from a previous $43.