The best thing about GrubHub is that most people have no idea what it is (GRUB)
<img style="float:right;" src="http://static4.businessinsider.com/image/54ef3d3b6da811b124f0c018-600-/grubhub-4.jpg" border="0" alt="grubhub" width="600">
Here is GrubHub's big opportunity: Most people have no idea what it is.
In a national survey, Morgan Stanley found that 44% of New Yorkers had never heard of the online food-ordering and delivery company or its Seamless unit.
Across the rest of the US, nearly 80% of people were clueless.
Yet this is precisely the best thing going for the company.
"Low penetration and consumer awareness could drive a 5x expansion in GRUB's user base," Morgan Stanley's Dean Prissman wrote in a note Wednesday.
<span style="line-height: 1.5em;">The firm notes that adoption of the service across the US is just 5%, with New York's 13% adoption rate — which the firm called "undemanding" — topping the list of the most popular GrubHub markets. </span>
<span>"</span>We believe increasing awareness will result in a broad-based secular shift where, over time, a substantial portion of consumers in all markets will eventually order food online and GrubHub will be a direct benefactor," <span>the firm wrote, adding that its research found that consumer habits with respect to ordering out were nearly identical across small and big cities. </span>
So as more people begin ordering food online, they will be choosing to use GrubHub or Seamless — or so Morgan Stanley thinks. By <span>the firm's analysis, GrubHub</span> has the potential to serve 109 million people across the country.
Morgan Stanley initiated coverage at "Overweight," with a share price target of $50. Shares were little changed at about $42 in trading Thursday, and they are up nearly 17% year-to-date.
The company is already taking steps to make itself more popular. In its fourth-quarter earnings release, it announced it had completed the acquisition of two similar companies — DiningIn and Restaurants on the Run — to expand its footprint.
In the most recent quarter, its revenues rose 50% year-over-year to $73.3 million, while net income surged 381% to $10.8 million.
Here's a chart of Morgan Stanley's projection of how GrubHub will grow over the next few years.
<img src="http://static3.businessinsider.com/image/54ef3b0c69bedda74c86bcc7-1037-676/screen-shot-2015-02-26-at-10.23.11-am.png" border="0" alt="Screen Shot 2015 02 26 at 10.23.11 AM">
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