Yahoo Finance US$51.00 - That's What Analysts Think Grubhub Inc. Is Worth After These Results
Grubhub Inc. (NYSE:GRUB) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues came in at US$1.3b, in line with forecasts and the company reported a statutory loss of US$0.20 per share, roughly in line with expectations. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
See our latest analysis for Grubhub
Taking into account the latest results, the latest consensus from Grubhub's 23 analysts is for revenues of US$1.45b in 2020, which would reflect a notable 10% improvement in sales compared to the last 12 months. The statutory loss per share is expected to greatly reduce in the near future, narrowing 375% to US$0.97. Yet prior to the latest earnings, analysts had been forecasting revenues of US$1.46b and losses of US$0.85 per share in 2020. So there's definitely been a decline in analyst sentiment after the latest results, noting the real cut to new EPS forecasts.
Although analysts are now forecasting higher losses, the average analyst price target rose 9.6% to 46.54167, which could indicate that these losses are expected to be "one-off", or analysts think they won't have a longer-term impact on the business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Grubhub, with the most bullish analyst valuing it at US$72.00 and the most bearish at US$30.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. It's pretty clear that analysts expect Grubhub's revenue growth will slow down substantially, with revenues next year expected to grow 10%, compared to a historical growth rate of 32% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 16% per year. So it's pretty clear that, while revenue growth is expected to slow down, analysts still expect the wider market to grow faster than Grubhub.
The Bottom Line
The most obvious conclusion is that analysts made no changes to their forecasts for a loss next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Grubhub's revenues are expected to perform worse than the wider market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Grubhub going out to 2024, and you can see them free on our platform here..
You can also see whether Grubhub is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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