GRUB - Embedded Expectations Analysis - 2020 04 02
ï€ Grubhub Inc. (GRUB:USA) currently trades above peer averages relative to UAFRS-based (Uniform) assets, with a 44.6x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management appears concerned about loyalty programs, restaurant partnerships, and overall growthï€ Specifically, management may have concerns about the time it will take to build on the Restaurant Supply initiatives, and they may lack confidence in their ability to diversify their revenue away from corporate and New York. In addition, they may have concerns about their ability to sustain growth in the number of restaurants signed up in their independent restaurant loyalty programs and about item costs related to their loyalty program. Furthermore, they may lack confidence in their ability to continue taking and maintaining share on their diner platforms, and they may be exaggerating their position in facilitating the transition of the way that consumers are interacting with restaurants. Also, they may have concerns about the value of increased investment in their sales force and signing up independent restaurants. Finally, they may have concerns about headwinds to DAG, and they may be exaggerating the number of devices that are launched with Grub Ultimate
Grubhub and its wholly-owned subsidiaries provide an online and mobile platform for restaurant pick-up and delivery orders. The company connects diners and restaurants through restaurant technology and platforms. Diners enter their delivery address or use geo-location within the mobile applications and the company displays the menus and other relevant information for restaurants in its network. Orders may be placed directly online, via mobile applications or over the phone. The company primarily charges the restaurant a per order commission that is fee based. In several markets, the company also provides delivery services to restaurants on its platform that do not have their own delivery operations.
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