Benchmark Co. Thinks GrubHub’s Stock is Going to Recover

By Ryan Adsit

Benchmark Co. analyst Daniel Kurnos maintained a Buy rating on GrubHub (GRUBResearch Report) today and set a price target of $90. The company’s shares closed yesterday at $69.93, close to its 52-week low of $60.20.

Kurnos said:

“We also believe the costs associated with some of the brand-level rollouts (notably Dunkin’) were not contemplated either, with management now potentially embedding some incremental expense with additional wins where they have any visibility. Against that backdrop, the Company may now also benefit from a KFC marketing campaign similar to 1Q (which, to be fair, would have adverse effects on frequency and AOV short-term), which could drive further sales and marketing leverage. We see active diner growth now up by over 26% y/y in 2019, a 400bp y/y acceleration, with likely upside from KFC.”

According to TipRanks.com, Kurnos is a 5-star analyst with an average return of 11.9% and a 56.1% success rate. Kurnos covers the Services sector, focusing on stocks such as Nexstar Media Group Inc, Sinclair Broadcast, and 1-800 Flowers.com.

Currently, the analyst consensus on GrubHub is a Moderate Buy with an average price target of $99.31, implying a 42.0% upside from current levels. In a report issued on July 16, Citigroup also reiterated a Buy rating on the stock.

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GrubHub’s market cap is currently $6.38B and has a P/E ratio of 118.49. The company has a Price to Book ratio of 4.36.

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Grubhub, Inc. operates as an online and mobile food-ordering company, which connects diners with local takeout restaurants. Its online and mobile ordering platforms allow diners and corporate businesses to order directly from takeout restaurants in the United States and London.