Pro Analysis

Grubhub to surge 29% on superior scale: Wedbush

The GrubHub Inc. app is displayed on an Apple Inc. iPhone 5 in Tiskilwa, Illinois, U.S., on Wednesday, April 2, 2014.
Daniel Acker | Bloomberg | Getty Images

Investors should buy Grubhub due its market dominance, first-mover advantage and future growth potential, according to Wedbush Securities, which initiated coverage of the internet food ordering company with an outperform rating.

"GRUB is the market leader in the growing online restaurant ordering and delivery space and will continue to benefit from its early lead and superior size and scale," Wedbush's Aaron Turner wrote in a note to clients Thursday.

"We believe recent delivery initiatives and strategic acquisitions coupled with continued diner adoption of mobile-based restaurant take-out and delivery methods should drive robust revenue and earnings growth for the foreseeable future."