This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Groupon: Dead as You Know It (Update 2)

Stocks in this article: GRPN AMZN GOOG

The company is still generating cash, though operating cash flow decreased 35% year over year to $42.1 million. As of the end of the quarter, the company had $1.2 billion in cash and cash equivalents. Groupon may use up a significant portion of this cash, as it transitions its business model from daily deals to goods.

Credit Suisse analyst Stephen Ju echoed the thoughts of Stifel's Rohan on investor worries as Groupon pivots its business model.

"We believe investor concern will continue to ensue given the company's short-term decision to prioritize growth in the far lower margin goods business, without clarity as to when growth will return to the higher margin daily deals business," Ju wrote in his research report. He has a neutral rating on Groupon shares with a $6.50 price target.

Groupon is clearly in a state of flux as it tries to recapture some of the luster it lost after accounting problems were uncovered in late April.

Hudson Square analyst Dan Ernst downgraded shares as the aggressive push of the goods segments potentially creates problems with its merchants. He also sees the goods business causing operating risks, as well as lower margins. Ernst lowered his rating to hold yet kept his $12 price target intact.

Investors looking to bet on a successful turnaround certainly won't need a "Groupon" when buying shares. Not at these levels, and perhaps not ever.

Interested in more on Groupon? See TheStreet Ratings' report card for this stock.

-- Written by Chris Ciaccia in New York

>Contact by Email.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,387.21 -291.49 -1.65%
S&P 500 2,029.55 -27.54 -1.34%
NASDAQ 4,681.4970 -90.2660 -1.89%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs