GrubHub Sinks Despite Posting Very Strong Earnings Beat
GrubHub released better-than-expected third-quarter earnings report before the markets opened on Wednesday.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
GrubHub Inc. (NYSE: GRUB) released its third-quarter earnings report before the markets opened on Wednesday. The company posted $0.23 in earnings per share (EPS) and $123.5 million in revenue. The consensus estimates from Thomson Reuters called for $0.19 in EPS and revenue of $118.45 million. In the same period of last year, GrubHub reported EPS of $0.13 and $85.66 million in revenue.
Gross food sales totaled $735 million in the quarter, a 33% year-over-year increase from $554 million in the third quarter of 2015.
Daily average grubs were 267,500, a 26% increase from 211,500 daily average grubs in the same period of last year. Active diners were 7.69 million, an increase of 19% from 6.43 million active diners in the third quarter of 2015.
In terms of guidance for the fourth quarter, the company expects to have revenues in the range of $136 million to $138 million and adjusted EBITDA in the range of $38 to $40. The consensus estimates are $0.23 in EPS and $136.18 million in revenue.
[nativounit]
Matt Maloney, CEO of Grubhub, commented:
We are pleased with Grubhub’s third quarter growth, as we continue building the most comprehensive marketplace for restaurants and takeout diners. Our product improvements and investment in delivery continue to generate high levels of sustainable growth. Grubhub is now delivering for restaurant partners in over 60 markets nationwide, and our growth rate is generally highest in markets where a substantial percentage of orders are being delivered by our drivers.
Adam DeWitt, CFO of Grubhub, added:
Grubhub had strong topline and bottom line results in the third quarter, generating record net revenues and significant operating leverage. This strong growth, combined with the high incremental margins of our business model, drove adjusted EBITDA per order to $1.44, a 31% increase compared to the third quarter of 2015.
On the books, Grubhub’s cash, cash equivalents and short-term investments totaled $296.6 million at the end of the quarter, versus $310.7 million at the end of 2015.
Shares of GrubHub were trading down over 6% at $40.67 on Wednesday, with a consensus analyst price target of $44.06 and a 52-week trading range of $17.77 to $44.58.
[wallst_email_signup]
Contact [email protected] for any questions or corrections.
Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
