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Northland Bullish On GrubHub, Initiates Outperform And Sees 'Compelling' Reasons To Boost Market Size

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Late Tuesday Northland Capital initiated on GrubHub Inc (NYSE: 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 its '"compelling" services by increasing demand "that was non-existent through the traditional alternative."

Recent investor worries over the impact to profitability due to investment in delivery services may blow over as "initiatives to reaccelerate profitability" improves over time.

Related Link: Buy The Dip In GrubHub, Sterne Agee CRT Says

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 Inc (NASDAQ: GOOG), TripAdvisor Inc (NASDAQ: TRIP) or Priceline Group Inc (NASDAQ: PCLN).

Latest Ratings for GRUB

Oct 2017Credit SuisseMaintainsNeutral
Oct 2017BarclaysMaintainsEqual-Weight
Oct 2017Canaccord GenuityMaintainsBuy

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