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Can Groupon Turn Itself Around With Earnings?
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Groupon Inc. (NASDAQ: GRPN) is set to report its fourth-quarter financial results after the markets close on Thursday. The consensus estimates from Thomson Reuters call for no earnings and $845.9 million in revenue. In the same period of the previous year, it posted $0.06 in earnings per share (EPS) on revenue of $925.4 million.
For the most part, third-quarter earnings were in line with street estimates, but the big surprise came from what the company had to say about expectations for the fourth quarter.
In terms of guidance, it announced that it expects adjusted results to range from a loss of $0.01 to earnings of $0.01 per share, with revenue in the range of $815 million to $865 million, for the fiscal fourth quarter.
Following the last earnings report, Merrill Lynch threw its hat in the ring with other analysts and issued a downgrade on Groupon to an Underperform rating with a $2.75 price objective. The firm expects sentiment to remain negative until Groupon demonstrates that the marketing investments are driving higher growth, which Merrill Lynch doesn’t expect until late 2016 or 2017, or Groupon delivers on improved international performance and profitability. Groupon is an investment on several positive Internet industry growth trends, including the migration of local commerce to online channels and growth in usage of mobile devices and apps.
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