Analysts have cited Grubhub's strong prospects for innovative food delivery as the mobile food delivery industry explodes. The company has over 45,000 participating restaurants and is working quickly to expand its network and grow the number of active users using the service. Argus is also forecasting some healthy earnings growth for the company.
"We are setting a 2016 adjusted EPS forecast of $0.90, up 32 percent from $0.68 in 2015. We project a further 29 percent increase in 2017, to $1.16," the analysts stated.
Analysts feel that shares are still favorably valued at current levels despite experiencing a 29 percent gain in the past three months. Shares are currently trading at a PEG ratio of 1.4, below the average of 1.8 for similar internet and software service companies, attractive considering Grubhub has a higher growth rate forecast than the industry, 25 percent vs 22 percent.
Argus has set a Buy rating on Grubhub with a price target of $52.
At last check, Grubhub was up 1.84 percent at $40.39.
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