Groupon Stock Declines Sharply, but Is It an Overreaction?

Groupon, Inc. shares fell more than 10% in early trading on Wednesday after the company reported worse-than-expected fourth quarter financial results. Revenue fell 3.5% to $873.17 million – beating consensus estimates by $20.36 million – but net income of seven cents per share missed consensus estimates by two cents per share. Management’s EBITDA guidance for the full year also fell short of consensus analyst estimates.

Despite concerns about falling revenue and rising market expenses, Piper Jaffray analyst Sam Kemp believes that lower-than-expected North American local billing growth is largely due to accounting headwinds. The analyst also believes that the 2018 guidance factors in a significant ramp-up in international marketing, while noting that management may be conservative. Piper Jaffray maintains its price target of $6.25 per share on Groupon stock. (See also: Groupon, Grubhub Shares Climb on Partnership.)


Groupon shares moved lower Wednesday morning on worse-than-expected fourth quarter results, but traders will be watching these levels. …read more

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Category: GRPN

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