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GrubHub (GRUB) to Report Q1 Earnings: What's in the Cards?
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GrubHub Inc. is set to release first-quarter 2018 results on May 1.
Last quarter, earnings of 37 cents per share beat the Zacks Consensus Estimate and surged 61% year over year. The company has a mixed record of earning surprises in the trailing four quarters, delivering an average positive surprise of 14.21%.
GrubHub has also surpassed the consensus mark for revenues in the trailing four quarters. Revenues surged 49.2% year over year to $205.1 million.
For first-quarter 2018, GrubHub forecasts revenues between $224 million and $232 million. Adjusted EBITDA is expected to be within $54-$60 million.
The Zacks Consensus Estimate for first-quarter earnings and revenues is currently pegged at 36 cents and $229 million, respectively.
Partnerships & Acquisitions Boost Penetration
Notably, shares of GrubHub have gained 33.1% year to date, significantly outperforming the industry’s 18.8% rally. Strong growth can be attributed to the company’s rapidly growing active diner base and strengthening delivery business.
Grubhub’s partnerships with the likes of Yelp (YELP - Free Report) and Yum! Brands (YUM - Free Report) are anticipated to help it rapidly penetrate the expanding food takeout market in the United States. Moreover, collaborations with American Express and Foursquare are expected to smoothen up customer experience.
The partnerships along with acquisitions like Eat24, OrderUp and Boston-based Foodler are helping the company acquire new diners. This was evident in the fourth quarter as active diners increased to 14.5 million from 8.2 million reported in the year-ago quarter.
Of these approximately 4 million diners were acquired through the Eat24 (acquired from Yelp) and Yelp platforms. The addition of Eat24 strengthens its position across Tier 1 markets and almost doubles business in a large number of Tier 2 markets.
However, increasing expenses due to planned expansion into new delivery markets is likely to keep margins under pressure. As these markets will take some time to generate volumes, higher upfront cost will hurt profitability.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
GrubHub has a Zacks Rank #2 and its Earnings ESP is -9.72%. Consequently, our proven model does not conclusively show that the company is likely to deliver a positive surprise this quarter.
Stock With a Favorable Combination
Here is a stock which, as per our model, has the right combination of elements to post an earnings beat this quarter:
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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GrubHub (GRUB) to Report Q1 Earnings: What's in the Cards?
GrubHub Inc. is set to release first-quarter 2018 results on May 1.
Last quarter, earnings of 37 cents per share beat the Zacks Consensus Estimate and surged 61% year over year. The company has a mixed record of earning surprises in the trailing four quarters, delivering an average positive surprise of 14.21%.
GrubHub has also surpassed the consensus mark for revenues in the trailing four quarters. Revenues surged 49.2% year over year to $205.1 million.
For first-quarter 2018, GrubHub forecasts revenues between $224 million and $232 million. Adjusted EBITDA is expected to be within $54-$60 million.
GrubHub Inc. Price and EPS Surprise
GrubHub Inc. Price and EPS Surprise | GrubHub Inc. Quote
The Zacks Consensus Estimate for first-quarter earnings and revenues is currently pegged at 36 cents and $229 million, respectively.
Partnerships & Acquisitions Boost Penetration
Notably, shares of GrubHub have gained 33.1% year to date, significantly outperforming the industry’s 18.8% rally. Strong growth can be attributed to the company’s rapidly growing active diner base and strengthening delivery business.
Grubhub’s partnerships with the likes of Yelp (YELP - Free Report) and Yum! Brands (YUM - Free Report) are anticipated to help it rapidly penetrate the expanding food takeout market in the United States. Moreover, collaborations with American Express and Foursquare are expected to smoothen up customer experience.
The partnerships along with acquisitions like Eat24, OrderUp and Boston-based Foodler are helping the company acquire new diners. This was evident in the fourth quarter as active diners increased to 14.5 million from 8.2 million reported in the year-ago quarter.
Of these approximately 4 million diners were acquired through the Eat24 (acquired from Yelp) and Yelp platforms. The addition of Eat24 strengthens its position across Tier 1 markets and almost doubles business in a large number of Tier 2 markets.
However, increasing expenses due to planned expansion into new delivery markets is likely to keep margins under pressure. As these markets will take some time to generate volumes, higher upfront cost will hurt profitability.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
GrubHub has a Zacks Rank #2 and its Earnings ESP is -9.72%. Consequently, our proven model does not conclusively show that the company is likely to deliver a positive surprise this quarter.
Stock With a Favorable Combination
Here is a stock which, as per our model, has the right combination of elements to post an earnings beat this quarter:
Fortinet (FTNT - Free Report) has an Earnings ESP of +2.70% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>