We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can the Grubhub-Dunkin' Partnership Help GRUB Stock Bounce Back?
Read MoreHide Full Article
Grubhub stock jumped over 3% in the opening hours of trading Monday following an announcement that it will partner with Dunkin' Brands . The coffee and donut giant’s stock climbed less than a percent.
Grubhub is set to deliver Dunkin' food and drinks, with the partnership set to start in New York City. Delivery will be available from over 400 locations across the five boroughs and is offered through Seamless, Grubhub’s New York brand. The companies also plan to expand the service in the coming months to cities that include Boston, Chicago and Philadelphia.
Meanwhile, Dunkin' competitor Starbucks (SBUX - Free Report) unveiled its delivery service earlier this year. Partnered with Grubhub competitor Uber Eats (UBER - Free Report) , Starbucks has started delivering in 6 other cities after the program had success in Miami. It is important to point out that expanding these programs for both Dunkin' and Starbucks may prove challenging as many people want their coffee to be hot, thus delivery may be limited to a relatively small range around any given store.
Uber Eats also has one of the more lucrative food delivery partnerships. Since staring a partnership in 2017 with McDonald's (MCD - Free Report) , Uber Eats has become available at over 9,000 McDonald’s stores and accounts for over 2% of all of McDonald’s business.
Grubhub’s stock has fallen 30% in the past 12 months and the company has also lost the lead in terms of market share. Grubhub, DoorDash and Uber Eats all compete to be the leader in the growing food delivery market. But while DoorDash has steadily increased in popularity, Grubhub has been on a decline. In March 2018, Grubhub had nearly double the market share of DoorDash with 34.4%, but has lost over 7% of its market share since then. Meanwhile, DoorDash has added over 10% to its market share, bringing it to 27.6% as of March 2019 to make it the new industry leader.
The new partnership is an opportunity for Grubhub to recapture some market share and expand its consumer base. Many consumers are often rushed in the morning so the addition of a coffee company to its services has the potential to draw in many new customers. Additionally, Dunkin' and Grubhub have special offers to draw in new customers, including a raffle for a bike and other prizes as well as free delivery from Monday, June 24 to Sunday, June 30, with certain exceptions.
Aside from these more temporary marketing plans, Grubhub has an optimistic outlook for both earnings and revenue. Zacks Consensus Estimates for fiscal 2019 does call for earnings to decrease by 13%, but Grubhub’s top-line is expected to grow by 35%. This top-line growth is projected to continue into fiscal 2020, with an additional 26% growth expected. Meanwhile, the company’s 2020 earnings are projected to surge 50% above our 2019 estimate. This would lead to expected EPS of $2.14 in fiscal 2020, compared to just $1.43 for fiscal 2019.
Radical New Technology Creates $12.3 Trillion Opportunity
Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.
Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.
Image: Bigstock
Can the Grubhub-Dunkin' Partnership Help GRUB Stock Bounce Back?
Grubhub stock jumped over 3% in the opening hours of trading Monday following an announcement that it will partner with Dunkin' Brands . The coffee and donut giant’s stock climbed less than a percent.
Grubhub is set to deliver Dunkin' food and drinks, with the partnership set to start in New York City. Delivery will be available from over 400 locations across the five boroughs and is offered through Seamless, Grubhub’s New York brand. The companies also plan to expand the service in the coming months to cities that include Boston, Chicago and Philadelphia.
Meanwhile, Dunkin' competitor Starbucks (SBUX - Free Report) unveiled its delivery service earlier this year. Partnered with Grubhub competitor Uber Eats (UBER - Free Report) , Starbucks has started delivering in 6 other cities after the program had success in Miami. It is important to point out that expanding these programs for both Dunkin' and Starbucks may prove challenging as many people want their coffee to be hot, thus delivery may be limited to a relatively small range around any given store.
Uber Eats also has one of the more lucrative food delivery partnerships. Since staring a partnership in 2017 with McDonald's (MCD - Free Report) , Uber Eats has become available at over 9,000 McDonald’s stores and accounts for over 2% of all of McDonald’s business.
Grubhub’s stock has fallen 30% in the past 12 months and the company has also lost the lead in terms of market share. Grubhub, DoorDash and Uber Eats all compete to be the leader in the growing food delivery market. But while DoorDash has steadily increased in popularity, Grubhub has been on a decline. In March 2018, Grubhub had nearly double the market share of DoorDash with 34.4%, but has lost over 7% of its market share since then. Meanwhile, DoorDash has added over 10% to its market share, bringing it to 27.6% as of March 2019 to make it the new industry leader.
The new partnership is an opportunity for Grubhub to recapture some market share and expand its consumer base. Many consumers are often rushed in the morning so the addition of a coffee company to its services has the potential to draw in many new customers. Additionally, Dunkin' and Grubhub have special offers to draw in new customers, including a raffle for a bike and other prizes as well as free delivery from Monday, June 24 to Sunday, June 30, with certain exceptions.
Aside from these more temporary marketing plans, Grubhub has an optimistic outlook for both earnings and revenue. Zacks Consensus Estimates for fiscal 2019 does call for earnings to decrease by 13%, but Grubhub’s top-line is expected to grow by 35%. This top-line growth is projected to continue into fiscal 2020, with an additional 26% growth expected. Meanwhile, the company’s 2020 earnings are projected to surge 50% above our 2019 estimate. This would lead to expected EPS of $2.14 in fiscal 2020, compared to just $1.43 for fiscal 2019.
Radical New Technology Creates $12.3 Trillion Opportunity
Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.
Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.
See the 7 breakthrough stocks now>>