GRUB - Embedded Expectations Analysis - 2020 07 21
Grubhub Inc. (GRUB:USA) currently trades above peer averages relative to UAFRS-based (Uniform) earnings, with a 94.0x Uniform P/E. However, even at these levels, the market has bearish expectations for the firm, and management appears concerned about demand, sales, and restaurant partnershipsSpecifically, management may have concerns about capped fees being imposed beyond San Francisco and Seattle, and they may lack confidence in their ability to drive sales for their restaurant partners, and profitability through their platform. Furthermore, they may lack confidence in their ability to ensure the safety of their deliverers, and might be exaggerating confidence that demand will recover in markets that have been hit hardest. Also, they may have concerns about their ability to execute planned initiatives, and they may be exaggerating the number of enterprise restaurants who want to become a partner
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.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.