Groupon Inc (GRPN): Today's Featured Internet Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

Groupon ( GRPN) pushed the Internet industry lower today making it today's featured Internet laggard. The industry as a whole closed the day up 0.3%. By the end of trading, Groupon fell $0.38 (-6.5%) to $5.46 on heavy volume. Throughout the day, 30,133,377 shares of Groupon exchanged hands as compared to its average daily volume of 17,321,300 shares. The stock ranged in price between $5.43-$5.89 after having opened the day at $5.88 as compared to the previous trading day's close of $5.84. Other companies within the Internet industry that declined today were: Deltathree ( DDDC), down 16.7%, Synacor ( SYNC), down 7.4%, Net Element International ( NETE), down 7.4% and Selectica ( SLTC), down 5.5%.
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Groupon, Inc. operates as a local commerce marketplace that connects merchants to consumers by offering goods and services at a discount in North America and internationally. The company also offers deals on products for which it acts as the merchant of record. Groupon has a market cap of $3.9 billion and is part of the technology sector. Shares are up 20.6% year to date as of the close of trading on Friday. Currently there are 2 analysts that rate Groupon a buy, 6 analysts rate it a sell, and 15 rate it a hold.

TheStreet Ratings rates Groupon as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.

On the positive front, Rediff.com India ( REDF), down 12.3%, Renren ( RENN), down 11.1%, LookSmart ( LOOK), down 10.6% and Sify Technologies ( SIFY), down 9.8% , were all gainers within the internet industry with Google ( GOOG) being today's featured internet industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the internet industry could consider First Trust Dow Jones Internet Idx ( FDN) while those bearish on the internet industry could consider ProShares Ultra Short Technology ( REW).

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