GRUB

GrubHub Inc

Consumer, TMT


Presented:12/06/2018
Price:$81.41
Cap:$7.38B
Current Price:$2.64
Cap:$2.55B

Presented

Date12/06/2018
Price$81.41
Market Cap$7.38B
Ent Value$12.97B
P/E Ratio53.81x
Book Value$15.81
Div Yield0%
Shares O/S90.70M
Ave Daily Vol2,240,905
Short Int9.45%

Current

Price$2.64
Market Cap$2.55B
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. The company's brands include GrubHub, Seamless, MenuPages, and Allmenus. GrubHub was founded on August 8, 2013 and is headquartered in Chicago, IL.

Publicly traded companies mentioned herein: Domino’s Pizza Inc (DPZ), GrubHub Inc (GRUB), McDonald’s Corp (MCD), Wingstop Inc (WING), Yelp Inc (YELP), Yum! Brands (YUM)

Highlights

Shares of GrubHub (GRUB) are attractively valued following a decline to ~$80 from the mid-$140s over the past 2 - 3 months. Fears of competition from UberEats, Postmates, and/or DoorDash in the US further compressing EBITDA are likely overblown, in the presenter’s opinion, and the upside for revenue and EBITDA that can be driven by the GRUB-Yum! Brands partnership (announced in early February 2018) is underappreciated by the Street. With the potential for this arrangement to drive gross food sales of $1.7B alone, versus the Street’s $1.2B estimate for next year, the stock seems to be mispriced. Assuming gross food sales and EBITDA above Street estimates, MSD% penetration on the Yum! partnership, and applying a 25x multiple to his 2019 EBITDA forecast yields a $105 stock target.

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Idea Discussion

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