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GrubHub (GRUB) Q3 Earnings: Will it Beat Estimates Again?
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GrubHub Inc. is set to report third-quarter 2016 results on Oct 26. Last quarter, the company posted a positive earnings surprise of 35.71%. The company has posted an average positive earnings surprise of 17.26% over the past four quarters.
Let’s see how things are shaping up for this quarter.
Why a Likely Positive Surprise?
Our proven model shows that GrubHub is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. GrubHub has the right combination of the two key components.
Zacks ESP: The company has an Earnings ESP of +6.67%. This is because the Most Accurate estimate stands at 16 cents while the Zacks Consensus Estimate is pegged lower at 15 cents.
Zacks Rank: GrubHub carries a Zacks Rank #3, which when combined with a positive ESP make us reasonably confident of an earnings beat.
Conversely, the Sell-rated stocks (Rank #4 and 5) should never be considered going into an earnings announcement.
What is Driving the Better-than-Expected Earnings?
GrubHub’s business model is a big positive as it is based on providing an online and mobile platform for restaurant pick-up and delivery orders in the U.S. through its strategic partnerships with restaurants. Its strong presence offers a competitive advantage.
Of late, the company has gained a lot of traction in the business driven by its branding efforts, ongoing improvements in products and the delivery network. In addition, the trend of maturing tier two markets also bodes well for the company.
In the recent past, the company had introduced gift cards and has also been testing a new recommendation platform. Such initiatives will likely lead to an increase in market share for the company. Moreover, the restaurant delivery segment continues to grow as such platforms being operational through any device greatly eases the process for restaurant owners. As such, we believe that prime players like GrubHub have placed themselves well to reap the benefits.
Nonetheless, the company does have to fend off competition from players like Postmates, DoorDash, Caviar, Yelp Inc.’s (YELP - Free Report) Eat24, Amazon, Uber and now even Facebook.
NN Inc. has an Earnings ESP of +4.35% and a Zacks Rank #2.
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GrubHub (GRUB) Q3 Earnings: Will it Beat Estimates Again?
GrubHub Inc. is set to report third-quarter 2016 results on Oct 26. Last quarter, the company posted a positive earnings surprise of 35.71%. The company has posted an average positive earnings surprise of 17.26% over the past four quarters.
Let’s see how things are shaping up for this quarter.
Why a Likely Positive Surprise?
Our proven model shows that GrubHub is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. GrubHub has the right combination of the two key components.
Zacks ESP: The company has an Earnings ESP of +6.67%. This is because the Most Accurate estimate stands at 16 cents while the Zacks Consensus Estimate is pegged lower at 15 cents.
Zacks Rank: GrubHub carries a Zacks Rank #3, which when combined with a positive ESP make us reasonably confident of an earnings beat.
Conversely, the Sell-rated stocks (Rank #4 and 5) should never be considered going into an earnings announcement.
What is Driving the Better-than-Expected Earnings?
GrubHub’s business model is a big positive as it is based on providing an online and mobile platform for restaurant pick-up and delivery orders in the U.S. through its strategic partnerships with restaurants. Its strong presence offers a competitive advantage.
Of late, the company has gained a lot of traction in the business driven by its branding efforts, ongoing improvements in products and the delivery network. In addition, the trend of maturing tier two markets also bodes well for the company.
In the recent past, the company had introduced gift cards and has also been testing a new recommendation platform. Such initiatives will likely lead to an increase in market share for the company. Moreover, the restaurant delivery segment continues to grow as such platforms being operational through any device greatly eases the process for restaurant owners. As such, we believe that prime players like GrubHub have placed themselves well to reap the benefits.
Nonetheless, the company does have to fend off competition from players like Postmates, DoorDash, Caviar, Yelp Inc.’s (YELP - Free Report) Eat24, Amazon, Uber and now even Facebook.
GRUBHUB INC Price, Consensus and EPS Surprise
GRUBHUB INC Price, Consensus and EPS Surprise | GRUBHUB INC Quote
Stocks to Consider
Here are a couple of stocks that, as per our model, have the right combination of the two key components:
Amazon.com Inc. (AMZN - Free Report) has an Earnings ESP of +10.47% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
NN Inc. has an Earnings ESP of +4.35% and a Zacks Rank #2.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>