Cowen Cuts Price Target Following GrubHub (GRUB) 3Q Results and Guidance
Cowen maintained a Market Perform rating on GrubHub Inc. (NYSE: GRUB), and cut the price target to $22.00 (from $25.00), following the company's 3Q results and guidance. Management gave initial guidance of ~$500M in incremental FY16 gross food sales (~$400M in net food sales, ex-tax & tip), which equals ~21% food sales growth, but only ~17% order growth after accounting for AOV inflation.
Analyst Kevin Kopelman commented, "GrubHub Q3 results were disappointing, with organic orders +22% ex-outages, vs. 25% in Q2 & 29% in Q1. Marketing expense also accelerated to +44%, courier investment increased, and revenue take rate was flat q/q, leading to a 6% reduction in FY EBITDA guide. We continue to be concerned by the influx of courier-based competitors, including Amazon, Postmates, DoorDash, and Uber. PT to $22 from $25."
For an analyst ratings summary and ratings history on GrubHub Inc. click here. For more ratings news on GrubHub Inc. click here.
Shares of GrubHub Inc. closed at $24.49 yesterday.