GrubHub provides an online and mobile platform for restaurant pick-up and delivery orders in the United States. The company was founded in 1999 and is based in Chicago, Illinois.
GRUB Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for GrubHub Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that GrubHub Inc ranked in the 18th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. The most interesting components of our discounted cash flow analysis for GrubHub Inc ended up being:
GrubHub Inc's effective tax rate, as measured by taxes paid relative to net income, is at 0 -- greater than just 0% of US stocks with positive free cash flow.
GrubHub Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at 0.96. This coverage rate is greater than that of just 24.82% of stocks we're observing for the purpose of forecasting via discounted cash flows.
The weighted average cost of capital for the company is 9. This value is greater than 75.86% stocks in the Technology sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as GRUB, try CPSH, BRKS, JKHY, TACT, and AMOT.