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GrubHub (GRUB) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

GrubHub (GRUB) closed at $59.34 in the latest trading session, marking a +1% move from the prior day. This change outpaced the S&P 500's 0.06% gain on the day. At the same time, the Dow added 0.16%, and the tech-heavy Nasdaq lost 0.13%.

Prior to today's trading, shares of the online food ordering service had lost 11.75% over the past month. This has lagged the Computer and Technology sector's loss of 4.41% and the S&P 500's loss of 2.95% in that time.

GRUB will be looking to display strength as it nears its next earnings release. On that day, GRUB is projected to report earnings of $0.27 per share, which would represent a year-over-year decline of 40%. Our most recent consensus estimate is calling for quarterly revenue of $329.93 million, up 33.45% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.29 per share and revenue of $1.37 billion, which would represent changes of -22.29% and +35.73%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for GRUB. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 8.07% lower. GRUB is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, GRUB is currently trading at a Forward P/E ratio of 45.54. For comparison, its industry has an average Forward P/E of 14.26, which means GRUB is trading at a premium to the group.

Also, we should mention that GRUB has a PEG ratio of 1.8. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Internet - Delivery Services stocks are, on average, holding a PEG ratio of 1.27 based on yesterday's closing prices.

The Internet - Delivery Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 167, putting it in the bottom 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow GRUB in the coming trading sessions, be sure to utilize Zacks.com.

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