A month has gone by since the last earnings report for GrubHub . Shares have lost about 5.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is GrubHub due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Grubhub Earnings and Revenues Beat Estimates in Q1
Grubhub reported first-quarter 2019 earnings of 30 cents per share, which beat the Zacks Consensus Estimate by a nickel. However, the figure plunged 42.3% on a year-over-year basis.
The decline can be attributed to higher investments in marketing and advertisements that fully offset strong top-line growth.
Revenues surged 39% year over year to $323.8 million, which also beat the consensus mark of $323 million.
Total costs & expenses jumped 56.7% year over year to $314.9 million. Operations & support, sales & marketing, technology, and general & administrative expenses increased 67.6%, 60.9%, 57.2% and 28.8%, respectively.
Revenue per order less operations and support costs was $3.46, up from $3.34 in the previous quarter.
Adjusted EBITDA decreased 20.6% from the year-ago quarter to $50.9 million. Adjusted EBITDA per order was $1.09, up from 98 cents in the previous quarter.
Gross Food Sales & Active Diners Increase
Gross food sales rallied 21% year over year to $1.5 billion.
Active Diners were 19.3 million, up 28% year over year. Daily Average Grubs (DAGs) were 521,000 compared with 436,900 reported in the year-ago quarter.
The Taco Bell advertising campaign that promoted partnership with GrubHub contributed an incremental few hundred thousand new diners and 100-150 basis points (bps) of incremental DAGs in the reported quarter.
Grubhub delivery accounted for slightly more than 30% of the company’s first-quarter 2019 DAGs.
During the reported quarter, the company added 5,000 enterprise locations by expanding its relationships with Dunkin' Brands, Pizza Hut, NTNs and Jersey Mike's, among others. The company also inked new partnerships with Smoothie King, Halal Guys, Golden Corral and Smokey Bones.
Guidance
For second-quarter 2019, GrubHub forecasts revenues between $305 million and $325 million. Adjusted EBITDA is anticipated to be $49-$59 million.
For 2019, GrubHub reiterated revenue guidance between $1.315 billion and $1.415 billion. Adjusted EBITDA is still expected to be $235-$265 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted -27.22% due to these changes.
VGM Scores
At this time, GrubHub has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, GrubHub has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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GrubHub (GRUB) Down 5.6% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for GrubHub . Shares have lost about 5.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is GrubHub due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Grubhub Earnings and Revenues Beat Estimates in Q1
Grubhub reported first-quarter 2019 earnings of 30 cents per share, which beat the Zacks Consensus Estimate by a nickel. However, the figure plunged 42.3% on a year-over-year basis.
The decline can be attributed to higher investments in marketing and advertisements that fully offset strong top-line growth.
Revenues surged 39% year over year to $323.8 million, which also beat the consensus mark of $323 million.
Total costs & expenses jumped 56.7% year over year to $314.9 million. Operations & support, sales & marketing, technology, and general & administrative expenses increased 67.6%, 60.9%, 57.2% and 28.8%, respectively.
Revenue per order less operations and support costs was $3.46, up from $3.34 in the previous quarter.
Adjusted EBITDA decreased 20.6% from the year-ago quarter to $50.9 million. Adjusted EBITDA per order was $1.09, up from 98 cents in the previous quarter.
Gross Food Sales & Active Diners Increase
Gross food sales rallied 21% year over year to $1.5 billion.
Active Diners were 19.3 million, up 28% year over year. Daily Average Grubs (DAGs) were 521,000 compared with 436,900 reported in the year-ago quarter.
The Taco Bell advertising campaign that promoted partnership with GrubHub contributed an incremental few hundred thousand new diners and 100-150 basis points (bps) of incremental DAGs in the reported quarter.
Grubhub delivery accounted for slightly more than 30% of the company’s first-quarter 2019 DAGs.
During the reported quarter, the company added 5,000 enterprise locations by expanding its relationships with Dunkin' Brands, Pizza Hut, NTNs and Jersey Mike's, among others. The company also inked new partnerships with Smoothie King, Halal Guys, Golden Corral and Smokey Bones.
Guidance
For second-quarter 2019, GrubHub forecasts revenues between $305 million and $325 million. Adjusted EBITDA is anticipated to be $49-$59 million.
For 2019, GrubHub reiterated revenue guidance between $1.315 billion and $1.415 billion. Adjusted EBITDA is still expected to be $235-$265 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted -27.22% due to these changes.
VGM Scores
At this time, GrubHub has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, GrubHub has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.