GrubHub Inc. (GRUB) shares fell about 10% during Tuesday's session after the food delivery company reported mixed second quarter financial results. Revenue rose 35.6% to $325.06 million, beating consensus estimates by $7.67 million, but non-GAAP earnings per share of 27 cents missed consensus estimates by three cents. The company's adjusted EBITDA also fell 19% to $54.7 million.
On an operational level, daily active grubs rose 16% to 488,900 but missed consensus forecasts calling for 494,900 grubs. The good news is that second quarter active diners rose 30% to 20.4 million, beating the 19.7 million estimate, and gross food sales were up 20% to $1.46 billion, beating the consensus estimate of $1.45 billion.
The company's third quarter and full-year guidance figures were in line with consensus estimates, with the exception of adjusted EBITDA. Full-year adjusted EBTIDA is projected to range fro $235 million to $250 million, which is lower than consensus estimates of $250.7 million. These metrics suggest that the company is struggling with margins amid growing competition.
From a technical standpoint, GrubHub stock reversed its breakout from Monday's session that stemmed from speculation that it could be a takeover target for Amazon.com, Inc. (AMZN). The stock now trades just above its 50-day moving average at $71.47. While the relative strength index (RSI) remains neutral with a reading of 45.37, the moving average convergence divergence (MACD) remains in a bearish downtrend.
Traders should watch for a breakdown from the 50-day moving average toward trendline support at around $60.00 over the coming sessions. If the stock rebounds from the 50-day moving average, traders could see some narrow trading between those levels and the 200-day moving average at $77.34. A breakout from the 200-day moving average appears unlikely at the moment given the bearish sentiment surrounding the stock.
The author holds no position in the stock(s) mentioned except through passively managed index funds.