Deutsche Bank upgraded the Chicago-based e-commerce company to "buy" with a $10 price target, as Groupon enters its "2.0" phase. Analyst Ross Sandler noted the company is in a position to grow billings at a rate of 20% or higher, as mobile continues to be key theme for the company, and it develops better search engine optimization (SEO) and search engine marketing (SEM), which could result in EBITDA being 30% higher than initially thought.
"Sentiment has improved since our initial November 'warm-up,' and now we are upgrading amidst the current transition phase before growth turns back up," Sandler wrote in a note.
Groupon shares were soaring 11% to $7.64 in morning trading.Groupon started off as a daily deals company, but Sandler believes the next five to 10 years for the company are going to look extremely different than the company that went public less than two years ago. The company has three primary growth drivers in the future, Sandler noted. "