fbpx

QQQ
-3.17
380.44
-0.84%
BTC/USD
+ 1052.14
61904.36
+ 1.73%
DIA
+ 0.82
355.14
+ 0.23%
SPY
-0.37
453.96
-0.08%
TLT
+ 1.57
140.99
+ 1.1%
GLD
+ 0.98
165.77
+ 0.59%

Benchmark Says GrubHub Will Be A Winner In The Food Delivery Space

July 19, 2019 9:12 am
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
Benchmark Says GrubHub Will Be A Winner In The Food Delivery Space

The food delivery space is big enough for several players and GrubHub Inc (NYSE:GRUB) can stand out as "one of the winners," according to Benchmark.

The Analyst

Benchmark's Daniel Kurnos initiated coverage of GrubHub with a Buy rating and $95 price target.

The Thesis

Kurnos said GrubHub's stock, along with some of its rivals, has been "unfairly punished" by the growing competitive landscape in third-party food delivery platforms. In GrubHub's case, the stock has rebounded about 25% from recent lows but is still trading 50% lower from its 52-week highs.

GrubHub holds the title as being the only consistently profitable and self-funded food delivery company in the space, Kurnos said which can be leveraged to drive growth from three catalysts.

  • The company can generate 40% or more of total orders from its Grub-managed delivery by the back half of 2021, which would generate "significant" capture rate gains and improving margins.
  • The company can benefit from new enterprise level customer wins or partnerships from restaurants that are attracted to GrubHub's unique vertical integration benefits.
  • GrubHub should see improving diner retention and quality while at the same time marketing spend will rationalize. This could generate sustainable active diner and daily average grubs (DAGs) growth in the high-teens to low 20% range.

Price Action

Shares of GrubHub were trading around $74.55 Friday morning.

Related Links:

The Sell-Side Upgrade Lifting GrubHub Shares Tuesday

Analysts: Amazon's Exit From Restaurant Delivery Implies Less Competition For GrubHub

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to Benzinga Podcasts and our YouTube channel.


Related Articles

Loup Sees 'Land Grab' Among Food Delivery Companies: What Investors Should Know

Loup Sees 'Land Grab' Among Food Delivery Companies: What Investors Should Know

If you’ve ordered food delivery, chances are you’ve seen different prices than what the restaurants charge in the physical locations. You also may have seen several promotions incentivizing you to place your order. read more
4 Uber Analysts Talk Q3 Delivery Outperformance, Prop 22 Passage

4 Uber Analysts Talk Q3 Delivery Outperformance, Prop 22 Passage

Analysts were raising their price targets on Uber Friday after the company reported third-quarter earnings led by strong growth in the delivery segment. read more
GrubHub Ditches Uber For Europe's Just Eat: What The Street Thinks

GrubHub Ditches Uber For Europe's Just Eat: What The Street Thinks

Food delivery company GrubHub Inc (NYSE: GRUB) agreed to sell itself to Europe's JUST EAT TAKEAW/ADR read more
Uber, GrubHub Analysts Dish Opinions On Reported M&A Talks: 'Not Surprising'

Uber, GrubHub Analysts Dish Opinions On Reported M&A Talks: 'Not Surprising'

If media reports are accurate that Uber Technologies Inc (NYSE: UBER) is in talks to acquire rival food delivery platform GrubHub Inc (NYSE: read more