Investing.com – Shares of online food delivery company GrubHub (NYSE:GRUB) lost more than 40% of their value Tuesday on at least five brokerage downgrades after the company projected weaker-than-expected fourth-quarter results amid intense competition.
The company expects revenue of $315 million to $335 million in the quarter. Analysts had been looking for $368 million. Earnings before interest, taxes, depreciation and amortization (EBITDA) were projected at $15 million to $25 million. To move forward, the company said it must spend more to expand its list of restaurant clients and keep consumers using its app.
While revenue was up 30% in the third quarter to $322 million, analysts tracked by Investing.com had expected $330 million. Adjusted earnings were in line at 27 cents a share. Dining orders were down 15% from a year ago, on top of an 11% decline in the second quarter.
Competition is intensifying from the likes of Uber Technologies (NYSE:UBER), DoorDash and Post Mates. That's forcing GrubHub to offer free delivery for customers of important restaurant chains like KFC, McDonald’s (NYSE:MCD) and Panera Bread (NASDAQ:PNRA).
The stock hit a 52-week high of $97.96 in February and has lost 65% of its value since. It went public at $26 in 2014 and peaked at $147 in early 2018.