This Day On The Street
Continue to site
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

Groupon Plunges: What Wall Street's Saying

UBS analyst Eric Sheridan (Neutral, $6.50 PT)

"We were positive on: a) continued traction within mobile (greater than half of all transactions, 92mm app downloads) & "Pull" (June 2014, 10% of NA traffic used search); b) a second consecutive quarter of EMEA customer growth (following six quarters of decline); c) stabilizing Groupon redemption trends, with the average number of unused Groupon's per customer down more than 25% YoY; and d) 20% QoQ growth in active deals (now at 240k from 200k end Q1 2014). We were less positive on: a) continued deceleration in NA unit growth, growing 8% YoY vs. 14% in Q1 2014; b) elevated marketing levels (order discounts, customer acquisition) and plans to spend more heavily on performance advertising (e.g., search) in 2H 2014; c) higher than expected investments required for TicketMonster; and d) continued lack of gross profit dollars within the 1P business (100% of gross profit dollars still generated by 3P)."

Jefferies analyst Brian Pitz (Hold, $7 PT)

"Groupon delivered a largely in-line Q but guidance came in below expectations. Mgmt has a sound strategy to get the biz back on its prior growth trajectory but the pace of execution is still somewhat underwhelming. In addition, LT margin profile remains uncertain as Goods biz ramps up and Co moves deeper into eCommerce. We reiterate our Hold rating but lower PT to $7."

Sterne Agee analyst Arvind Bhatia (Buy, $12 PT)

"While the optics of near-term results may seem mediocre to slightly disappointing, we think the progress we were hoping for in 2Q was mostly there. North America Local billings improved slightly (though offset by lower take-rate) and accelerated towards the end of the quarter/beginning of 3Q, Goods gross margins improved more than anticipated and RoW (ex acquisitions) came close to break-even."

Deutsche Bank analyst Ross Sandler (Buy, $7 PT)

"GRPN's performance hit its fourth consecutive quarter of disappointing and sluggish growth, but despite some EMEA headwinds, billings, GP and EBITDA were +1%, -3% and +11% vs. our estimates, more or less in-line. Objectively, we see several silver-linings, including: 1) EV is sub-$4B, and valuation has been halved in the past two prints while 2015 EBITDA has been reduced far less, 2) local-mobile-transactional companies are proving to be strong strategic footprints, highlighted by the eight parties interested in OpenTable, and GRPN is in over 50 countries with significant scale, 3) Marketplaces are fragile and take time to turn, and comps get easier starting in 3Q (Gmail and purchase-to-redeem, and 4) Groupon's business is in much better shape than last time shares were below $6 in 2013. We've reduced our EBITDA to well below guidance again, shares remain Buy rated."

Read More: 8 Stocks George Soros is Buying in 2014

-- Written by Chris Ciaccia in New York

>Contact by Email.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr 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

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
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!
SYM TRADE IT LAST %CHG
GRPN $7.01 -1.48%
AAPL $132.65 1.82%
FB $81.91 0.47%
GOOG $555.37 -1.71%
TSLA $231.55 6.01%

Markets

DOW 18,037.97 -42.17 -0.23%
S&P 500 2,108.92 -8.77 -0.41%
NASDAQ 5,060.2460 -31.8390 -0.63%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs