Shares of Grubhub Inc. tumbled to a 17-month low Friday, amid concerns over increasing competition from Uber Technologies Inc.’s Uber Eats business.
The Chicago-based online and mobile food-ordering services company’s stock fell 5.6% in active afternoon trade. Volume topped 4.7 million shares, more than double the full-day average of 2.3 million shares.
The stock GRUB, -5.80% was headed toward the lowest close since November 2017. It has plummeted 55% since closing at a record $146.73 on Sept. 11, 2018, compared with a 0.6% gain in the S&P 500 index SPX, +0.58% over the same time.
Uber made its filing for an initial public offering public late Thursday. After the Uber Eats app launched “just over three years ago,” the ride-hailing service giant said it believes “Uber Eats has grown to be the largest meal delivery platform in the world outside of China based on gross bookings.”
In another apparent dig, Uber also said in the S-1 filing that it believes its scale enables the average delivery time for Uber Eats to be faster than the average delivery time for its competitors.
And Uber said there were more than 220,000 restaurants in over 500 cities globally in its Uber Eats network as of Dec. 31, while Grubhub said in its 2018 annual report that it had more than 105,000 restaurants in more than 2,000 U.S. cities.
“What began as a small pilot program has expanded to more than 13,000 McDonald’s restaurants globally, which we were able to quickly scale up thanks to our global platform,” Uber said.
Grubhub operates only in the U.S.
Wedbush analyst Ygal Arounian reiterated his outperform rating on Grubhub but slashed his stock price target by 23%, to $100 from $130, to reflect “continued changes in competitive dynamics.”
Arounian said it was difficult to compare GrubHub’s financials with the metrics Uber used for Uber Eats, because Uber lumped both its restaurant delivery orders and ride-share rides into one total trips number.