According to a study from Zion & Zion, Grubhub is the most popular multi-restaurant delivery service in the US with 37.8% of respondents using the app, followed by Uber Eats at 36% and DoorDash at 19.9%.
Notably, the app’s most frequent users are between 18- and 29-years-old (63%), followed by 30-44-year-olds (51%).
The heaviest users are people with income under $10,000 (51.6%), indicating that the convenience of the service offered seems to be valuable enough to forgive the fees that are typically included.
Comments
I see food delivery services experiencing increased uptake (particularly by Millennials and Gen Z) as part of the generational shift in consumer spending patterns: younger generations value convenience and are quite happy to socialise “from home”.
GrubHub addresses a category left alone by competitor: Low income families. UberEats or its European competitor Deliveroo basically address an average basket size north of 40$ and therefore not competing so much with GrubHub.
The company is valued at 37.4x P/E Next Twelve Months (NTM), they have no Net Debt and are beginning to generate high CFs. This is "cheap" for a CAGR Topline Growth > 25% over the next 3 years.
I could see them acquire some competitors in different locations or even increase their footprint in the US.
It is definitely a company to look at in the short term as it performed badly in H2-2018 (along with the Tech Industry).
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