Can Groupon Turn Itself Around With Earnings?

By Chris Lange Updated Jan 13, 1:17PM EST · Published Feb 11, 12:05PM EST

Can Groupon Turn Itself Around With Earnings? — © Thinkstock

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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A few other analysts weighed in on Groupon prior to the release of its earnings report:

Brean Capital reiterated a Buy rating with a $5 price target.
Macquarie reiterated a Buy rating with a $3.50 price target.
Sterne Agee upgraded to a Buy rating from Neutral with a $20 price target.

So far in 2016, Groupon has vastly underperformed the broad markets, with the stock down roughly 27% year to date. However, over the past 52 weeks shares have dropped nearly 70%.

Shares of Groupon were trading down 2.9% at $2.18 on Thursday, with a consensus analyst price target of $3.74 and a 52-week trading range of $2.15 to $8.37.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.