GrubHub Soars on 4Q17 Results

Stock rose 30% in February 2018

GrubHub (GRUB) saw its stock rise 30% in February 2018. The firm has generated significant returns of 183% in the trailing 12-month period after rising 91% in 2017. GrubHub is currently trading at $99.41, which is 206% above its 52-week low of $32.43 and 1.6% below its 52-week high of $101.03. In comparison, shares of peer companies such as Groupon (GRPN) and Yelp (YELP) generated returns of -23% and -1.3%, respectively, in February 2018.

GrubHub Soars on 4Q17 Results

GrubHub stock rose 21% in the week ended February 9, 2018, after the firm announced 4Q17 results. GrubHub reported revenue of $205.1 million, which was 1.7% above the average revenue estimates of $201.7 million. The firm’s non-GAAP (generally accepted accounting principles) EPS (earnings per share) was $0.37, which again beat analyst estimates of $0.31 by almost 20%.

Significant rise in revenue and EPS in 4Q17

GrubHub’s revenue rose 49% YoY (year-over-year), while the firm’s EPS rose 61% YoY in 4Q17, primarily driven by its acquisition of Eat24 from Yelp (YELP) last year. GrubHub now has a base of 14.5 million active diners at the end of 4Q17, a rise of 77% YoY. GrubHub has doubled its participating restaurants to 80,000 over the last 24 months. GrubHub announced a partnership with Yum Brands (YUM) according to which the latter will invest approximately $200 million in GrubHub resulting in an exclusive online partnership.

In the above table, we can see that GrubHub’s sales rose almost 90% over the last two years. In comparison, EBITDA, operating profit, and net income rose 75%, 65%, and 142%, respectively, between fiscal 2015 and fiscal 2017. Analysts expect GrubHub’s revenue to rise 40% YoY in fiscal 2018 to $953 million, 23% YoY to $1.18 billion in fiscal 2019, and 18.3% YoY to $1.4 billion in fiscal 2020.