Continue Reading Below
Shares ofGrubHub Inc.(NYSE: GRUB) soared 31% in April, according to data from S&P Global Market Intelligence. The stock skyrocketed toward the end of the month on a strong first-quarter earnings report.
The chart below tells the story.
The online restaurant delivery business showed off strong growth across the board in its first-quarter report as user growth, revenue, and profits all grew more than anticipated. The parent of sites like Seamless, MenuPages, and its namesake GrubHub said revenue jumped 39% in the period to $156.1 million, which was better than expectations of $153 million.
That growth was fueled by a 26% jump in active diners to 8.75 million and 21% growth in Daily Average Grubs, or orders, to 324,600. On the bottom line, adjusted earnings per share increased from $0.20 to $0.29, beating estimates of $0.24.
CEO Matt Maloney said, "More new diners tried GrubHub than ever before in the first quarter.We are seeing clear signs of success from a more diverse restaurant base, broader marketing reach, and continuous improvement of our product."
Image source: GrubHub.
As the leader in the fast-growing online restaurant delivery industry, GrubHub is likely to see a long tail of growth ahead of it -- with the business complementing other trends in e-commerce as more Americans stay home to do things that they used to go out for like shop and stream movies. The company is also better positioned in smaller cities across the country than rivals like UberEats and Postmates, giving it an advantage.
For the current quarter, GrubHub sees revenue growing by about 30% to $153 million-$161 million and a similar pace for the full year. With its operating leverage and momentum, profit growth could be even stronger.
10 stocks we like better than GrubhubWhen 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 May 1, 2017