NEW YORK (TheStreet) -- Groupon (GRPN) investors have gotten a raw deal for most of 2014. Ever since the deals giant reached a year-to-date high of $12.42 in January, shares have been under pressure, falling roughly 50%. The stock, at $6.40, is down over 45% for the year to date.
Investors received some much-needed good news Tuesday. Analyst Sameet Sinha at B. Riley upgraded Groupon shares to buy from neutral while also raising his price target from $6 to $9.50. This represents a 47% premium from Monday's close of $6.45, making the stock one of the best deals on the market.
The way I see it: As long as Groupon continues to move in the right direction with revenue, profits and its global expansion initiatives, investors will do well. The problem is analysts disapprove of Groupon's use of capital. In other words, any money Groupon uses to grow the business is seen as "burning through cash."
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV