By Ezra Kaplan

Shares of GrubHub Inc plunged 11 percent Wednesday despite beating expectations for both revenue and profit in the first quarter. Instead investors reacted to possible signs of slowing revenue growth rates even as the company is expanding.

For the quarter ended March 31 net income more than doubled to $10.6 million, or 12 cents per diluted share, from $4.4 million, or 6 cents a share in a year ago period. Revenue rose 50 percent to $88.2 million from $58.6 million in the same quarter a year ago.

GrubHub’s earnings per share adjusted for the acquisition of two companies was 12 cents, 2 cents short of analysts’ expectations.

Shares of GrubHub fell $4.90 to $40.40 amid heavy volume Wednesday.

“GrubHub stock was very highly valued to begin with,” said Blake Harper, an analyst at Wunderlich Securities Inc.

He questioned whether the company’s sales would be able to sustain its increased spending.

GrubHub finalized acquisitions of two restaurant delivery service companies, expanding its delivery network across the nation.

On a conference call with analysts, CEO Matt Maloney said that growing markets such as Denver, Miami and Phoenix “are all bigger now than Los Angeles was just three years ago and they all exhibit robust growth momentum.”

Maloney said the number of active diners was up 46 percent to 56 million from the same time a year ago. The average number of daily transactions and gross food sales were also up.

However these numbers represented a slowing of sales growth according to Kevin Kopelman, an analyst at Cowen and Company. According to his analysis, the company’s order growth grew only 30 percent this past quarter as compared to 33 to 34 percent in each of the past three quarters.

“Some investors are not recognizing the longer term play of really investing for long term cash flow,” said Maloney in an interview with the Chicago Tribune. “We’re not executing on a short-term time frame.”