Roth Capital Believes GrubHub (NYSE: GRUB) Won’t Stop Here

By Jason Carr

In a report released today, Darren Aftahi from Roth Capital reiterated a Buy rating on GrubHub (NYSE: GRUB), with a price target of $55. The company’s shares opened today at $46.13, close to its 52-week high of $48.16.

Aftahi said:

“We reiterate our Buy . Slightly conservative 2Q expectations with partial lapping of LAbite. We look for 2Q17 sales/adj. EBITDA/Non-GAAP EPS estimates of $157.1M/$42.2M/$0.25, a hair below consensus of $158.1M/$42.6M/$0.26, respectively . Our conservatism strings from 2Q16 being representative of its LAbite acquisition (which closed 5/11/16), which thus makes 2Q the start of moderately tougher comparables (although really 3Q to be fair, which partially will be offset by Foodler, once closed). When considered, we still model for sales growth of ~31% y/y, only a ~600bp slowdown y/y . Per expectations, we model for increased marketing up ~30% y/y, yielding our assumptions of adj. EBITDA margins declining ~500bps, and growth of ~12%, well below the ~40% + average GRUB has seen over the past 12 months. However, we do model for adj.”

According to TipRanks.com, Aftahi is a 1-star analyst with an average return of -0.2% and a 50.3% success rate. Aftahi covers the Technology sector, focusing on stocks such as The Meet Group Inc, Mitek Systems Inc, and Angie’s List Inc.

GrubHub has an analyst consensus of Moderate Buy, with a price target consensus of $48.22.

GrubHub’s market cap is currently $4.01B and has a P/E ratio of 69.89. The company has a book value ratio of 3.9701.

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GrubHub, Inc. operates as an online and mobile food-ordering company, which connects hungry 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. The company’s brands include GrubHub, Seamless, MenuPages and Allmenus.