Citi Reiterates Buy Rating on GrubHub Inc. (GRUB)

Citi analyst Mark May reiterated a Buy rating on GrubHub Inc. (NYSE: GRUB) after performing his monthly checks and coming away with 10 datapoints:

1) GRUB made significant changes to its platform and we now track 744 different Chain brands covering 33,797 locations (vs 192 chains and 22,047 locations as of January)

2) Of the top 25 chains on GrubHub, on average only 27% of their total U.S. locations were currently activated on GrubHub (i.e., growth opportunity)

3) GRUB added 320 new KFC and 186 Taco Bell locations from January to April, and ~62% of total KFC and Taco Bell locations are now activated

4) With 22% of GRUB’s total chain locations, California is GRUB’s largest state, by far, on a locations basis

5) Subway has the greatest number of unique locations on GrubHub (4,639), closely followed by Yum!’s Taco Bell (4,328)

6) 15 of the top 25 QSRs in the U.S. use multiple online home delivery partners (i.e., only four have exclusives) and DoorDash and Postmates are tied at 16 with the most top 25 QSR partnerships, followed by GrubHub (15)

7) The average delivery fee for all chains on GrubHub was $2.51 (Taco Bell averaged $2.93, while KFC averaged
$3.17 – and both have a unique additional 12.5% service fee)

8) The average delivery time for all chains on GrubHub was 37 minutes (KFC averaged 34 minutes,
while Taco Bell averaged 28 minutes)

9) App download and DAU data from SimilarWeb suggests that DoorDash is the fastest growing online food delivery service in the U.S. and that GrubHub saw a relatively meaningful deceleration in
April

10) our new Amazon Restaurant data shows that the company is still way behind in the competition in terms of restaurant coverage

For an analyst ratings summary and ratings history on GrubHub Inc. click here. For more ratings news on GrubHub Inc. click here.

Shares of GrubHub Inc. closed at $62.54 yesterday.

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