How Analysts View Groupon After Earnings

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Groupon Inc. (NASDAQ: GRPN) reported its fourth-quarter financial results before the markets opened on Wednesday. The results were very positive and shares actually jumped by roughly 23% in trading Wednesday. Although investors seemed to love these results analysts took a more muted view on the stock.

24/7 Wall St. has included some highlights from the earnings report as well as how analysts are updating their views on the stock.

This online coupon company said that it had $0.07 in earnings per share (EPS) and $934.9 million in revenue. That compares to the fourth-quarter of last year that had $0.04 in EPS and revenue of $917.17 million. The Thomson Reuters consensus estimates called for EPS of $0.02 and $912.77 million in revenue for the most recent quarter.

North America local billings grew 11% year over year in the fourth quarter 2016, with customer additions reaching 2.0 million as well. Roughly, 1.0 million unique customers were added from LivingSocial.

In terms of guidance for the 2017 full year, Groupon expects to exit 11 countries as part of its streamline and simplify initiative, and the company expects to report these countries as discontinued operations beginning in first quarter 2017.

For 2017, Groupon expects gross profit to be in the range of $1.30 billion to $1.35 billion, an increase of $40 to $90 million compared to full year 2016 results for the 15 countries in it go-forward footprint on an foreign exchange–neutral basis. Consensus estimates call for $0.08 in EPS and $3.21 billion in revenue for this year.

A few analysts weighed in on Groupon after the earnings report was released:

  • Wedbush downgraded to a Neutral rating from Outperform and lowered the price target to $4.50 from $5.
  • Credit Suisse has a Neutral rating and raised its price target to $4.50 from $4.
  • RBC has a Sector Perform rating and lowered the price target to $4 from $5.
  • Evercore ISI has a Price target of $5.30.
  • B. Riley reiterated a Neutral rating with a $4.50.
  • Macquarie has a price target of $5.50.
  • Jefferies has a Hold rating and raised its price target to $5 from $4.75.
  • Morgan Stanley has a $3.90 price target.
  • Goldman Sachs has a Neutral rating and raised its price target to $5 from $4.80.
  • UBS raised its price target to $3.75 from $3.

Shares of Groupon were last trading at $4.60, with a consensus analyst price target of $4.74 and a 52-week trading range of $2.92 to $5.94.