Several investment firms have updated their stock ratings and price targets on shares of Groupon (NASDAQ: GRPN) in the last week:
- Groupon was downgraded by analysts at Bank of America from a “neutral” rating to an “underperform” rating. They now have a $4.20 price target on the stock, down previously from $5.35. They wrote, “Rev./CSOI of $638mn/$13.7mn vs. Street at $647mn/$46mn with non-GAAP EPS of ($0.08), below the Street at $0.03. The biggest negative in the quarter was the GM miss (55.7% vs. our 66.0% est.), which was driven by the rapid mix shift to lower margin Goods, and a q/q decline in 3rd Party and direct margins. … Despite double-digit customer growth, with gross profit declining y/y Groupon has arguably the weakest fundamentals in our eCommerce coverage sector and a close to in-line 2014E P/E, which warrants an Underperform vs. the group. We are lowering our PO to $4.20 (from $5.35) based on an unchanged 18x multiple on a lower 2014 EPS of $0.23. Our 18x PO multiple is a discount to the group at 22x, reflecting a business model still in transition, GM pressure and EPS uncertainty.”
- Groupon was downgraded by analysts at Wells Fargo from an “outperform” rating to a “market perform” rating.
- Groupon was downgraded by analysts at Raymond James from a “market perform” rating to an “underperform” rating.
- Groupon had its price target lowered by analysts at Evercore Partners to $4.30.
- Groupon had its price target lowered by analysts at Piper Jaffray from $8.00 to $7.00. They now have an “overweight” rating on the stock. They wrote, “Last week, we upgraded shares of GRPN, based on expectations of an improving international business. While overall international billings were up 6% y/y in Dec-12 vs. -12% in Sep-12 and our estimate of -1%, international take rates fell dramatically (31% Dec-12 vs. 41% Sep-12), and subsequently, Mar-13 revenue guidance, was reported 10% below the Street, while CSOI was ~40% below the Street. While the decrease in take rate was disappointing, we are reiterating our OW rating, as the quarter did see some incremental progress internationally and continued NA growth (Rev +109%).”
- Groupon had its “sell” rating reaffirmed by analysts at Ascendiant Capital Markets. They now have a $3.50 price target on the stock, up previously from $2.50. They wrote, “Pro forma EPS was $(0.01), compared to our and consensus estimates of $0.03. Q4 guidance was for revenue of $625 – 675 million and operating income of $0 – 20 million (which implied EPS of $0.00 – 0.03)…[M]anagement provided initial Q1 2013 guidance for revenue of $560 – 610 million and operating income of $(10) – 10 million, which is well below current consensus estimates.”Ascendiant Capital maintained a cautious outlook for 2013. “We believe uncertainties with Groupon remain due to staff turnover, competition, and increased investments. In our view, the slowing growth and weak margins are likely to bolster continued skepticism as to Groupon’s valuation, growth prospects, and profit potential despite its lower valuation and multiples.”
- Groupon had its “buy” rating reaffirmed by analysts at Sterne Agee. They wrote, “While 4Q will disappoint the Street as operating profit was below expectations, we believe shares are attractive for longer-term investors willing to play the turnaround. There were signs of improvement exiting 4Q and also to-date in 1Q. 1Q’13 and full year 2013 guidance implies a gradual profit recovery in the coming quarters. Demand reaccelerated as 4Q billings grew 25% sequentially after twoconsecutive quarters of 5% declines. However, higher-than-expected op ex cut into profits.”
- Groupon had its “hold” rating reaffirmed by analysts at Jefferies Group. They now have a $4.00 price target on the stock. They wrote, “Groupon reported another miss quarter with strong gross billings growth but somewhat disappointing revenue growth and surprisingly low margins. Revenue growth of 30% Y/Y was driven by 109% Y/Y growth in NA, offsetting a decline of 16% Y/Y (-14% ex-FX) internationally. In addition, 1Q13 guidance came materially short of expectations. We reiterate our Hold rating and $4 PT.”
Groupon traded up 3.97% on Tuesday, hitting $5.635. Groupon has a 1-year low of $2.60 and a 1-year high of $18.98. The stock’s 50-day moving average is currently $5.38. The company’s market cap is $3.702 billion.
Groupon, Inc. offers online retail services. The Company provides daily deal on the stuff to do, eat, see and buy in more than 500 markets in 44 countries.
Get Analysts' Upgrades and Downgrades via Email - Stay on top of analysts' coverage with Analyst Ratings Network's FREE daily email newsletter that provides a concise list of analysts' upgrades and downgrades. Click here to register now.
