Defying Market Sentiment: Grubhub


All-time highs despite broader market correction

Both the S&P500 and Dow Jones Industrial Average have fallen into market correction (price drop of 10% from peak) this week. Meanwhile, Grubhub has shot up to all-time highs and now at $85.54/share or a market valuation of $7.4 billion.

What is more impressive was that the company reported an impressive 38% rise in revenue and 100% increase in profits thus being rewarded by investors in recent times.

“Over the past two years we have taken incredible strides in expanding the breadth and depth of our restaurant network, growing the number of local restaurants we work with from 40,000 to over 80,000 today.

“The partnership with Yum! which we announced this morning will accelerate the expansion of our delivery network and amplify our diner acquisition efforts, raising consumer awareness of online ordering and driving more volume for all restaurants across our platform.”

Grubhub CEO, Matt Maloney

Grubhub also took in $174 million in debt (0.16x debt-equity) and grown its book value by 15% year over year to $1.1 billion.

In the past three fiscal years, Grubhub raised $219 million in financing activities and accumulated $160 million in free cash flow.

Analysts have an average price target of $89/share (vs. $85.05 at the time of writing). Applying generous growth and multiples indicated a per share figure of $103/share.

Disclosure: No shares in Grubhub.

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