GrubHub shares rose almost 23% on Wednesday after the company announced its plan to acquire mobile food-ordering platform LevelUp, and reported strong sales and profits in the latest quarter.
The surge pushed GrubHub shares to an all-time high of $138.85 during regular trading hours today.
The online food ordering company surpassed earnings and revenue expectations for the fourth consecutive quarter. It saw $1 billion in quarterly gross food sales, which was a 39% increase year over year, and it counted 15.6 million active users in the latest quarter, up 70% from just a year ago.
In response to these strong results, GrubHub CEO and founder Matt Maloney said, “You are seeing tremendous growth in our sector and we’re the leader, and we created the whole category, and we continue to push the boundaries, now, so we’re in a great place to receive a significant amount of that offline-to-online transition.”
In response to the stock rally, Guggenheim Partners analyst Matthew DiFrisco said that, although “earnings were a fantastic beat,” the news of the LevelUp acquisition is the biggest contributor to the impressive gain in share prices.
GrubHub said its $390 million purchase of Boston-based Levelup would help bolster its order volume and make it easier for big-named fast food chains such as KFC and Taco Bell to integrate with the GrubHub platform.
LevelUp isn’t GrubHub’s first acquisition. Previous moves, such as its purchase of Eat24 in October 2017, were intended to help the company’s inorganic growth and mostly aimed to increase scale.
On the other hand, the purchase of LevelUp is more about strategic positioning in the market and integration of its technology, such as its point of sale (POS) platform. This means that LevelUp could help GrubHub complete orders directly through its existing POS system.
Though the actual acquisition may still take some time due to standard closing conditions, its positive impact seems to be already well underway.
Investors should also note that GrubHub currently holds a Zack Rank #2 (Buy).
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Grubhub Beats Earnings, LevelUp Acquisition Lifts Stock to All-Time High
GrubHub shares rose almost 23% on Wednesday after the company announced its plan to acquire mobile food-ordering platform LevelUp, and reported strong sales and profits in the latest quarter.
The surge pushed GrubHub shares to an all-time high of $138.85 during regular trading hours today.
The online food ordering company surpassed earnings and revenue expectations for the fourth consecutive quarter. It saw $1 billion in quarterly gross food sales, which was a 39% increase year over year, and it counted 15.6 million active users in the latest quarter, up 70% from just a year ago.
In response to these strong results, GrubHub CEO and founder Matt Maloney said, “You are seeing tremendous growth in our sector and we’re the leader, and we created the whole category, and we continue to push the boundaries, now, so we’re in a great place to receive a significant amount of that offline-to-online transition.”
In response to the stock rally, Guggenheim Partners analyst Matthew DiFrisco said that, although “earnings were a fantastic beat,” the news of the LevelUp acquisition is the biggest contributor to the impressive gain in share prices.
GrubHub said its $390 million purchase of Boston-based Levelup would help bolster its order volume and make it easier for big-named fast food chains such as KFC and Taco Bell to integrate with the GrubHub platform.
LevelUp isn’t GrubHub’s first acquisition. Previous moves, such as its purchase of Eat24 in October 2017, were intended to help the company’s inorganic growth and mostly aimed to increase scale.
On the other hand, the purchase of LevelUp is more about strategic positioning in the market and integration of its technology, such as its point of sale (POS) platform. This means that LevelUp could help GrubHub complete orders directly through its existing POS system.
Though the actual acquisition may still take some time due to standard closing conditions, its positive impact seems to be already well underway.
Investors should also note that GrubHub currently holds a Zack Rank #2 (Buy).
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 >>