Oppenheimer Thinks GrubHub’s Stock is Going to Recover

By Ryan Adsit

In a report released today, Jason Helfstein from Oppenheimer reiterated a Buy rating on GrubHub (GRUBResearch Report), with a price target of $94. The company’s shares closed yesterday at $69.78, close to its 52-week low of $63.31.

Helfstein observed:

“We’re conservatively lowering our target to $94 from $108 on lower terminal margins related to competition, but maintain our Outperform as marketing and platform investments are already paying off, with record diner growth and EBITDA ahead of expectations. 1Q diner adds +159% y/y were meaningfully ahead our/Street expectations. Management also provided a cohort analysis showing healthy retention rates and improving diner quality, despite concerns that increased spending by peers was causing lower quality ads. This was somewhat offset by weaker 2Q guidance, suggesting even more back-end loaded expectations for top and bottom- line. However, we expect large chain integrations to be announced over the next few quarters. Current valuation gives investors “tech stack”/white-label software platform for free. Our price target implies 5x 2020E revenue, the low-end of marketplace peers.”

According to TipRanks.com, Helfstein is a top 100 analyst with an average return of 19.5% and a 68.2% success rate. Helfstein covers the Technology sector, focusing on stocks such as Endurance International, ANGI Homeservices Inc, and Spotify Technology SA.

GrubHub has an analyst consensus of Moderate Buy, with a price target consensus of $100.33, representing a 43.8% upside. In a report issued on April 12, Wedbush also maintained a Buy rating on the stock with a $100 price target.

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GrubHub’s market cap is currently $6.33B and has a P/E ratio of 81.52. The company has a Price to Book ratio of 4.39.

Based on the recent corporate insider activity of 150 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of GRUB in relation to earlier this year. Most recently, in February 2019, Brian Mcanews, a Director at GRUB bought 20,186 shares for a total of $76,000.

TipRanks has tracked 36,000 company insiders and found that a few of them are better than others when it comes to timing their transactions. See which 3 stocks are most likely to make moves following their insider activities.

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.