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What to Expect from GrubHub (GRUB) this Earnings Season?

GrubHub Inc.GRUB is set to report fourth-quarter 2016 results on Feb 8. Last quarter, the company posted a positive earnings surprise of 26.67%. The company has posted an average positive earnings surprise of 26.01% over the past four quarters .

Let's see how things are shaping up for this quarter.

Factors to Consider

GrubHub's business model is a big positive as it is based on providing an online and mobile platform for restaurant pick-up and delivery orders in the U.S. through its strategic partnerships with restaurants. Its strong presence offers a competitive advantage.

Of late, the company has gained a lot of traction in the business driven by its branding efforts, ongoing improvements in products and the delivery network.

Per analysts, bad weather in December across GrubHub's major markets should translate into higher number of delivery orders, which bodes well for revenue growth.

While GrubHub does have an advantage in the space, its business model requires huge volumes to be effective since it charges a lower-than-average rate. This will inevitably put pressure on the company if it fails to successfully implement its pricing strategy and secure more volumes. In addition, competition in the space remains rife with players like Yelp Inc.'s Eat24, Amazon and Uber and more.

GrubHub Inc. Price and EPS Surprise

GrubHub Inc. Price and EPS Surprise | GrubHub Inc. Quote

Earnings Whispers

Our proven model does not conclusively show that GrubHub will beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP : GrubHub has a 0.00% ESP because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 20 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: GrubHub currently has a Zacks Rank #4. We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stock to Consider

Here are some stocks that, as per our model, have the right combination of elements to post an earnings beat this quarter:

Twilio Inc. TWLO with an Earnings ESP of +8.33% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here .

Pandora Media, Inc. P with an Earnings ESP of +10.81% and a Zacks Rank #3.

CenturyLink, Inc. CTL with an Earnings ESP of +1.79% and a Zacks Rank #3.

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CenturyLink, Inc. (CTL): Free Stock Analysis Report

Pandora Media, Inc. (P): Free Stock Analysis Report

GrubHub Inc. (GRUB): Free Stock Analysis Report

Twilio Inc. (TWLO): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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