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GrubHub Inc GRUB

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

COVID-19-Induced Demand Drives Increase in Grubhub’s Q1 Revenue

Ali Mogharabi Senior Equity Analyst

Analyst Note

| Ali Mogharabi |

Grubhub reported strong first-quarter revenue growth as it continued to benefit from increased demand for online food delivery during the pandemic. However, the firm must continue to spend heavily on marketing to compete with DoorDash and UberEats. Grubhub is being acquired by Just Eat Takeway.com in an all-stock deal likely to close in June of this year, making this the last quarter in which Grubhub will report as a standalone company. We do not believe this deal will improve no-moat Grubhub’s competitive positioning in the U.S. While we project strong demand for online food delivery, we are uncertain that the current levels will be sustainable given the continuing increase in vaccinations and overall economic recovery in the U.S., both of which likely will increase demand for dine-in service. We value Grubhub at $71per share based on the current market price of Just Eat Takeaway.com.

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Company Profile

Business Description

Founded in 2004, Grubhub provides an online takeout food platform for diners and restaurants. The firm generates revenue by charging restaurants a commission based on each order amount. It also charges consumers a delivery fee for orders where the firm handles the delivery. Grubhub has over 50,000 restaurant partners.

Contact
111 W. Washington Street, Suite 2100
Chicago, IL, 60602
T +1 877 585-7878
Sector Communication Services
Industry Internet Content & Information
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Distressed
Employees 2,841

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