The firm expects the company, which manages online platforms for food ordering and delivery, to see competition increase in New York City, which accounts for about half of the company's total revenue.
"While 4Q results were better than expected, driven by margins, and FY16 guidance was modestly better, we are increasingly concerned that competition from Amazon (AMZN) and Uber in NY... will cut into revenues and profitability, sometime in the next 12-18 months," Oppenheimer analysts wrote in a note this morning.
GrubHub's margins will be pressured by "reduced order rates, more expensive customer acquisition costs and lower commission rates" if Amazon and Uber gain market share in New York City's food delivery scene, analysts added.
Shares of GrubHub are up 1.35% to $21.82 in mid-morning trading on Friday as the stock continues to gain following strong 2015 fourth quarter financial results, which the company reported on Thursday before the market open.
Separately, GrubHub has a "sell" rating and a letter grade of D at TheStreet Ratings because of the company's disappointing stock performance and weak operating cash flow.
You can view the full analysis from the report here: GRUB
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.GRUB data by YCharts