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Subject:  GRUB Date:  12/9/2018  10:57 AM
Author:  huddaman Number:  49290 of 57028

I was wondering if GRUB is ever discussed as a high growth holding on this forum.

GRUB unlike many others is also making a decent profit (by this board's standards lol)

Also, it has pretty decent growth by this board's standards.

According to the links here:

https://investors.grubhub.com/investors/press-releases/defau...

Here are the YoY growths starting with most recent quarters and going back

Q3-18 52% to $247 million
Q2-18 51% to $240 million
Q1-18 49% to $232.6 million
Q4-17 49% to $205 million
Q3-17 32% to $163 million
Q2-17 32% to $159 million

P/S using the above and market cap of $7 billion is 7.57
P/E using TTM EPS $1.84 and P of $77 is only 41.84 (mind blowing)

What they do is, they own seamless.com and grubhub.com. This competes with doordash and uber eats.

They enable restaurants to get online and accept customer food orders from there. Customers only need to store their credit cards in one place (on Grub's website) and dont need to hand it over on the phone to restaurants. Second advantage is, customers can search a wide array of restaurants in their area, read reviews, and place the order from single place. Another advantage is, it remembers your order history, so you can simply re-order. You dont have to call the restaurant, face busy lines, or deal with incorrect orders due to miscommunication. It is very convenient and I have used it quite a bit, especially when I am in NYC. They also let you sort by restaurants that will deliver as opposed to pickup only.

How do they make money? Their revenue is the commission they deduct on food orders. They actually sold $1.2 billion of food last quarter, and out of that, their own revenue is $247 million, i.e 20.5% of that. That's how reenue they booked.

I have spoken to people in the industry associated with restaurants. They hate the fees, but obviously have no choice. TI find the model awfully similar to Priceline, Expedia and Booking. Its different from the customers point of view, but from my point of view as a stock-holder of BKNG and GRUB, I find similarities and equal potential. Booking enables a hotel to improve their occupancy and in return earns a hefty commission (I have spoken to couple of hotel owners). GRUB does the same thing to restaurants. If a restaurant needs the incremental sales,they have to be on Seamless/grubhub platforms. Otherwise, they can miss out on those incremental dollars. Grub just lends out its technology platform and earns the commission.

From the sales growth history, the business seems to be doing great.

I have been in it for a while but failed to cash out near the peak. But I think this is a long-term holding and there is no point in cashing out too early and missing the forest for the trees.

Huddaman
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