Analyst Delivers Bad News for GrubHub Stock

KeyBanc sees GRUB losing customers to DoorDash and UberEats

Managing Editor
Mar 19, 2019 at 2:17 PM
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The Dow is heading toward its fifth straight win ahead of tomorrow's Fed announcement. Among stocks making particular noise today are CBD drink specialist New Age Beverages Corp (NASDAQ:NBEV), meal delivery firm GrubHub Inc (NYSE:GRUB), and drugmaker Vaxart Inc (NASDAQ:VXRT). Here's a quick look at what's got the shares of NBEV, GRUB, and VXRT moving today.

NBEV Dips Despite Upbeat 2019 Guidance

This morning, New Age Beverages issued a better-than-expected 2019 revenue forecast. NBEV stock climbed as high as $5.80 in response, but at last check is trading right at 0.6% lower at $5.46. The overhead $6 level has been stiff resistance for the past month, with its year-to-date breakeven at $5.20 emerging as support. In the past nine months, though, thanks to its foray into CBD-infused drinks, NBEV is up 162.5%. 

Now seems to be a good time for traders to speculate on NBEV's near-term trajectory with options. The security's Schaeffer's Volatility Index (SVI) of 98% ranks in the 5th annual percentile, meaning short-term options are extremely cheap at the moment, from a historical volatility perspective.

KeyBanc Thinks Crowded Field a Problem for GRUB

Near the bottom of the New York Stock Exchange (NYSE) sits GrubHub stock, down 5.7% to trade at $72.63, after a warning from KeyBanc. One analyst there sees diminished customer retention and spending due to stiffening competition from DoorDash and UberEats. The data suggests "the company will have to add 3x as many new diners" in the third quarter as last year "to maintain a stable active diner base."

GRUB shares have consolidated below the $85 level since mid-November, and are set for their lowest close since early January. Nevertheless, GRUB options traders have been loading up on calls. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day call/put volume ratio of 4.15 ranks in the 94th percentile of its annual range. The high percentile indicates a much healthier-than-usual appetite for long calls over puts of late.

However, considering short interest jumped by 27% in the past two reporting periods and represents 20% of the stock's total available float, it's possible some of those calls -- particularly at out-of-the-money strikes -- may have been bought by shorts hedging against any unexpected upside. 

VXRT Races Higher After Clinical Trials for Norovirus Drug

One of the top stocks on the Nasdaq today is Vaxart, up 50% to trade at $2.43, after the drugmaker started its clinical trials for an oral treatment of norovirus. VXRT earlier traded as high as $5, but has pared its gains after the company priced a direct offering at $2.50 per share.

The equity is still on track to topple its 100-day moving average for the first time since late November. The shares traded at a record low of $1.44 on March 9, and could further distance themselves if shorts start abandoning ship. Short interest has more than doubled since November, and represents 10% of VXRT's total available float.

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