Why GrubHub Inc. Stock Surged Today

By Jeremy Bowman Markets Fool.com

What happened

Continue Reading Below

Shares ofGrubHub Inc.(NYSE: GRUB) were surging today after the restaurant delivery expert posted a blockbuster first-quarter earnings report.

As of 11:08 a.m. EDT, the stock was up 18.9%.

Image source: Getty Images.

So what

The nation's leading takeout marketplace beat estimates on top and bottom lines as revenue jumped 39%, to $156.1 million, and adjusted earnings per share improved from $0.20 a year ago to $0.29. Analysts had expected revenue of $153 million and $0.24 in EPS.

Continue Reading Below

CEO Matt Maloney said, "More new diners tried Grubhub than ever before," as active diners increased 26%, to 8.75 million, in the quarter, accelerating from 21% the quarter before. He added, "We are seeing clear signs of success from a more diverse restaurant base, broader marketing reach, and continuous improvement of our product."

Now what

Looking ahead, the parent of delivery sites like Seamless and MenuPages lifted its full-year revenue guidance from $620 million-$660 million to $632 million-$662 million; consensus expectations are for revenue to come in at $644.3 million. The company also raised the bottom end of its adjusted full-year EBITDA range from $165 million to $170 million.

As more Americans demand convenience and turn to their smartphones for things like ordering dinner, GrubHub should have a long runway of growth ahead of it. The company is executing on all levels, and the stock should continue to move higher as it grows its user base and gains operating leverage.

10 stocks we like better than Grubhub
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now and Grubhub wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of April 3, 2017

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.