Positive Analyst Note Sends GrubHub Stock Higher

GrubHub stock has nearly tripled over the past year

Managing Editor
Apr 24, 2018 at 9:55 AM
facebook twitter linkedin


GrubHub Inc (NYSE:GRUB) stock is trading higher, after D.A. Davidson raised its price target to $100 from $80. This comes just after the Sohn Conference kick-off, where Li Ran from Half Sky Capital said that GrubHub "is the leading online food delivery platform in the U.S.," and waxed optimistic on the firm's North American growth potential, particularly among millennials. Further, Ran's upside target for GRUB stock is $160 per share -- a more than 55% premium to the current stock price.

GrubHub shares are currently up 0.8% to trade at $103.01. GRUB stock has picked up nearly 200% over the past year, touching a record high of $112.41 on March 13. Since then, the equity has taken a breather, but found support atop its rising 50-day moving average.

There's room for more upbeat analyst attention, too, as the average 12-month price target of $102.45 is a discount to GRUB's current price. Plus, the majority of analysts maintain "hold" or "strong sell" ratings, meaning GRUB could enjoy upgrades in the near future.

Short interest on GRUB rose 18% during the most recent reporting period, and now represents 21% of the stock's total available float. At GrubHub stock's average daily trading volume, it would take just over a week for the shorts to cover their bearish bets. That's plenty of fuel for a potential short squeeze to send the stock to higher highs.

The security's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.83, which ranks in the 82nd percentile of its annual range. Though the ratio indicates that short-term calls still outnumber puts on an absolute basis, the elevated percentile indicates that near-term traders have rarely shown a greater preference for GRUB puts over calls in the last year. An exodus of option bears could also fuel the security's fire.

Lastly, those who have bought premium on GRUB stock have been consistently rewarded over the last 12 months. The stock's Schaeffer's Volatility Scorecard (SVS) of 93 out of 100 indicates that GrubHub shares have easily exceeded options traders' volatility expectations in the past year.


A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earnings guide for Q3 before it's too late!


  
 
Special Offers from Schaeffer's Trading Partners