Wedbush Reiterates Outperform on GrubHub (GRUB) as comScore Shows Solid Traffic
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Wedbush reiterated an Outperform rating and $47.00 price target on GrubHub Inc. (NYSE: GRUB) as the comScore shows July traffic to GRUB sites as roughly in line with May and June levels. Despite GRUB’s post-earnings share appreciation, short interest remains north of 25%, down only 5% from pre-Q2 earnings level of 30%.
Analyst Aaron Turner commented, "Traffic data from comScore shows July traffic to GRUB sites roughly in line with May and June levels and significantly higher than April (fig. 1). We see this as a good start to the quarter and indicates seasonality impact may be less than anticipated. While we acknowledge that we expect to see traffic variability month-to-month (case in point: last April compared with May and June) we believe July data lowers the hurdle for August and September traffic necessary for guidance achievement. We view comScore traffic as a strong predictor of organic Gross Food Sales (fig. 2) as the correlation over the past eight quarters has been high (corr: 94%, RSQ: 88%). We believe this is attributable to high purchase intent among users when they visit GRUB’s online properties."
Shares of GrubHub Inc. closed at $38.53 yesterday.
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