DA Davidson's Cheat Sheet For GrubHub's Q3

Online food ordering service GrubHub Inc (NYSE: GRUB) is scheduled to report its third-quarter results Oct. 25, and D.A. Davidson shared its forecast this week of what investors can expect from the quarterly print and conference call.

The Analyst

D.A. Davidson's Tom Forte maintains a Neutral rating on GrubHub with an unchanged 12-18-month price target of $115 and five-year price target of $157.

The Thesis

GrubHub is expected to report the following in Q3, Forte said. (See his track record here.) 

• Sales growth of 46.5 percent to $238.8 million, near the high end of management's guidance.
• Adjusted EBITDA growth of 42.6 percent to $61 million, short of the consensus estimate of $62.8 million.
• Adjusted EPS of 37 cents, short of the Street forecast of 41 cents per share.
• A 70-percent increase in active diners to 16.7 million.
• Daily average user growth of 32 percent to 402,000.

During the post-earnings conference call investors should listen for the following commentary, the analyst said: 

• How strategic partnerships can open up smaller markets.
• Future M&A strategy and any update on the Tapingo acquisition.
• Early commentary on the LevelUp acquisition.
• The impact of advertising efforts.
• Plans for expanding e-sports sponsorships. 
• Potential negative impacts from higher wages and rising fuel costs.

Price Action

GrubHub shares were down nearly 1 percent at $116.19 at the time of publication Friday.

Related Links:

GrubHub's Q2 Shows Continued Growth In Underpenetrated Sector, Says Incrementally Bullish KeyBanc

GrubHub's Brand Is Becoming 'Second Nature' For Food Delivery, Canaccord Says

Photo courtesy of GrubHub.