GrubHub Inc. Concerns about tougher competition, higher spending, and lofty valuations are weighing down this high-growth stock. Shares of Grubhub (GRUB) tumbled 12% on Oct. 25 after the company released its third quarter earnings report.
Full Answer
What happened to the GrubHub stock?
The Amsterdam-based delivery provider said Tuesday that it will delist from the Nasdaq stock exchange sometime in the first quarter of 2022. It cited its low share price and the low percentage of its total shares held on Nasdaq (about 3.7%).
Why did GrubHub stock drop so much?
The immense competition from companies such as Uber Eats (UBER), Delivery Hero, Postmates, and DoorDash (DASH) caused Grubhub's market share to drop significantly within the last years, with gross margins declining accordingly.
Why did just eat takeaway stock drop?
Just Eat Takeaway.com (NASDAQ: GRUB) shareholders lost ground to the market on Thursday as the stock fell 13% by 3 p.m. ET compared to a 0.1% increase in the S&P 500. The slump followed the global food delivery specialist's fourth-quarter earnings report, which came up short of some investors' expectations.
Is Grub a good stock to buy?
GrubHub Inc (NYSE:GRUB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GRUB is 59.1.
Is Grub delisted?
AMSTERDAM, Feb 13 (Reuters) - Just Eat Takeaway.com (TKWY.AS) CEO Jitse Groen said on Sunday the company's decision to de-list its shares from the Nasdaq stock exchange should not be taken as an indication of plans to sell its Grubhub subsidiary.
Which is better DoorDash or GrubHub?
Both services have a wide range of restaurant options, but there can be some differences in terms of availability. For example, DoorDash may be available in more areas than GrubHub. And while both services offer a variety of food options, DoorDash may have more restaurants to choose from.
Who is buying out Grubhub?
Just Eat TakeawayAmsterdam-based Just Eat Takeaway (JET) on Tuesday completed its acquisition of Chicago-based Grubhub in a $7.3 billion, all-stock transaction that makes the combined entity one of the largest food delivery companies in the world, with primary operations in the U.S., Germany, the U.K., Canada and the Netherlands.
Is Grubhub getting sold?
JET agreed to acquire Chicago-based Grubhub in a $7.3 billion deal in 2020, which at the time created the largest food delivery company outside China, connecting restaurants with delivery partners in 25 countries.
Will Just Eat sell Grubhub?
Just Eat Takeaway is exploring a sale of Grubhub barely a year after buying the company. Just Eat Takeaway.com said Wednesday it is considering a full or partial sale of Grubhub. The company bought the U.S. food delivery platform for $7.3 billion barely a year ago.
Is Grubhub owned by seamless?
Seamless is a part of the Grubhub Inc. portfolio of brands.
How profitable is Grubhub?
Even with this loss of marketshare, Grubhub has continued to generate more revenue every year since going public. It has climbed from $500 million in 2016 to $1.8 billion in 2020.
How much is Grubhub worth?
What started as a simple way to order food from Chicago restaurants has grown into an online food-delivery empire worth over $4 billion.
How much did Grubhub invest in marketing?
That's why the company plans to invest an incremental $20 million to $30 million in marketing and the expansion of its delivery network during the fourth quarter. Furthermore, Grubhub announced that its chief operating officer, Stanley Chia, was resigning to become the CEO of another company.
How much will the food delivery market grow in 2022?
The US food delivery market could still grow from $43 billion in 2017 to $76 billion in 2022 according to Cowen analyst Andrew Charles. This means that there's still plenty of room for the market leaders to grow without trampling each other.
Is Grubhub stock rosy?
Grubhub's insiders also don't seem to have a rosy outlook for the company. Over the past 12 months, insiders sold nearly 750,000 shares of the stock, and haven't purchased a single share on the open market. The stock also still trades at over 40 times next year's earnings -- and that multiple could surge higher if analysts slash their estimates.
Why did Grubhub lose its value?
GrubHub had lost over half its value in the past three years, largely due to competition from Uber Eats and DoorDash. At least 14 shareholder lawsuits have been brought against GrubHub since the merger announcement a year ago, claiming the company acted unlawfully in the course of the merger agreement.
Is GRUBHub a food delivery company?
GrubHub, a key player in the online and mobile food delivery market since 2004, has made a major business shift this week. The Chicago-based company announced that it's merging with Just Eat Takeaway.com, a similar food delivery company operating in 24 countries.
Is GRUBhub publicly traded?
GrubHub, which has traded publicly on the NYSE since 2014, has been in talks with Just Eat Takeaway about a potential merger for some time. As a result of the merger, existing shareholders of GrubHub’s common stock are being issued new shares of ADSs for Just Eat Takeaway.
What happens to investors who were holding Gubhub shares?
One last question before we wrap up is: What happens to the investors who were holding Gubhub shares? Shareholders were issued ADSs (foreign stock tradeable on US exchanges) for Takeaway Just Eat based on their holdings. Takeaway stock will begin trading under GRUB (which has been suspended) as of tomorrow. Don't be alarmed by the price drop. You still own shares of the combined company that is now one of the largest food delivery companies worldwide. They have a great shot at profitability and growth.
How can food delivery companies grow their profits?
There is not much profit left to be made in the delivery side of the market. Therefore, operations scaling and sharing technology infrastructure are the main ways food delivery companies can grow their profits. It seems that's what the new merger is all about.
Is TKAYF a grubhub?
Across the pond, Grubhub's counterpart in Europe, Takeaway.com ( TKAYF), has decided to creator a global food delivery giant by acquiring it. This expansion to a global giant started from the Netherlands, continued into a merger with Britain’s Just Eat service, and is now completed by the acquisition of GrubHub today .
Is the food delivery industry low margin?
With the combined forces of existing customer bases and great growth due to the pandemic, the new company is poised to become a serious contender for the top spot in the US food delivery market. Generally speaking, the food industry is a low-margin business. There is not much profit left to be made in the delivery side of the market. Therefore, operations scaling and sharing technology infrastructure are the main ways food delivery companies can grow their profits. It seems that's what the new merger is all about.
Is Lordstown stock going to have pickup?
Although the announcement calmed investors, Lordstown confirmed it would have a limited pickup production, leaving more uncertainties for the future. No wonder why the 11% stock price jump during the normal trading hours gradually faded down to 7% in the after-hours trading.
How much revenue did Grubhub make in the third quarter?
GrubHub reported third-quarter revenue of $123.5 million, up 44% year over year and $5 million higher than the average analyst estimate. Active diners rose just 19% to 7.69 million, daily average "grubs" (that is, orders) jumped 26% to 267,500, and gross food sales increased 33% to $735 million.
Is GrubHub profitable?
GrubHub continues to grow at an impressive rate, and the company is profitable, unlike many other fast-growing upstarts. But with a market capitalization of roughly $3.4 billion, GrubHub is valued at 46 times analyst estimates for full-year non-GAAP earnings. Rapid revenue growth and margin improvement need to continue for many years for this valuation to be justified.
New York City moves to cap commissions for food delivery apps
Evan is a Senior Technology Analyst at The Motley Fool. He was previously a Senior Trading Specialist at Charles Schwab, and worked briefly at Tesla. Evan graduated from the University of Texas at Austin, and is a CFA charterholder.
What happened
Shares of Grubhub ( NYSE:GRUB) have fallen today, down by 8% as of 12:20 p.m. EDT, after the New York City Council late yesterday approved a measure that caps the fees that online food ordering and delivery platforms can collect. New York City is one of the biggest markets for food delivery apps.
So what
The New York City Council voted yesterday on an emergency bill that is designed to help small businesses and local restaurants during the COVID-19 pandemic.
Now what
Consumers in the Big Apple recently filed an antitrust lawsuit against the platforms regarding high fees, arguing that those costs are inevitably passed on to customers in the form of higher prices. Uber, which is also affected by the news given its Uber Eats platform, is reportedly weighing a $6 billion acquisition offer for GrubHub.
Comparing Grubhub Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Grubhub Inc. has a market capitalization of US$5.7b, and reported total annual CEO compensation of US$8.3m for the year to December 2020. That's a fairly small increase of 6.0% over the previous year.
A Look at Grubhub Inc.'s Growth Numbers
Over the last three years, Grubhub Inc. has shrunk its earnings per share by 123% per year. In the last year, its revenue is up 49%.
Has Grubhub Inc. Been A Good Investment?
The return of -49% over three years would not have pleased Grubhub Inc. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude..
The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown.
