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What's in Store for GrubHub (GRUB) This Earnings Season?

GrubHub Inc.GRUB is set to release second-quarter 2018 results on Jul 25.

In the last reported quarter, earnings of 52 cents per share beat the Zacks Consensus Estimate and surged 79.3% year over year. The company has an average four-quarter positive surprise of 20.12%.

GrubHub also surpassed the consensus mark for revenues in the trailing four quarters. In the last reported quarter, revenues surged 49% year over year to $232.6 million.

For second-quarter 2018, GrubHub forecasts revenues between $228 million and $236 million. Adjusted EBITDA is expected to be within $59-$65 million.

The Zacks Consensus Estimate for second-quarter earnings and revenues is currently pegged at 41 cents and $232.6 million, respectively.

Acquisitions & Partnerships: Tailwinds

Acquisitions and partnerships are anticipated to help GrubHub rapidly penetrate the expanding food takeout market in the United States. The company's rapidly growing active diner base and strengthening delivery business are also major positives.

Acquisitions like that of Eat24, OrderUp and Boston-based Foodler are helping the company acquire new diners. As of Mar 31, 2018, active diners were 15.1 million, compared with 8.8 million in the year-ago quarter.

Grubhub has partnerships with the likes of Yelp YELP and Yum! Brands YUM . Moreover, collaborations with American Express and Foursquare are expected to improve customer experience.

Recently, Yum! Brand closed its previously-announced investment in GrubHub, making the latter the only national U.S. ordering partner for Yum! Brands. Under the partnership, GrubHub will provide a comprehensive online ordering solution for KFC and Taco Bell franchises, sub-divisions of Yum! Brands.

However, increasing expenses due to planned expansion into new delivery markets are likely to keep margins under pressure. Moreover, rising competition from Uber Eats is a major headwind.

GrubHub Inc. Price and EPS Surprise

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

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP . The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

GrubHub has a Zacks Rank #1 and its Earnings ESP is -4.88%, which indicates an unlikely positive surprise. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Stock to Consider

Here is a stock you may consider as our proven model shows that it has the right combination of elements to post an earnings beat this quarter.

Twitter, Inc. TWTR has an Earnings ESP of +7.06% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

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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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