Trade-Ideas: Groupon (GRPN) Is Today's Pre-Market Leader Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Groupon ( GRPN) as a pre-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Groupon as such a stock due to the following factors:

  • GRPN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $233.0 million.
  • GRPN traded 10,800 shares today in the pre-market hours as of 9:23 AM.
  • GRPN is up 2.4% today from yesterday's close.

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More details on GRPN:

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. Currently there are 3 analysts that rate Groupon a buy, 1 analyst rates it a sell, and 17 rate it a hold.

The average volume for Groupon has been 16.9 million shares per day over the past 30 days. Groupon has a market cap of $6.3 billion and is part of the technology sector and internet industry. Shares are up 95.3% year to date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Groupon as a sell. Among the areas we feel are negative, one of the most important has been weak operating cash flow.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to $8.76 million or 89.53% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Internet & Catalog Retail industry and the overall market, GROUPON INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for GROUPON INC is rather high; currently it is at 63.02%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -0.66% trails the industry average.
  • This stock has increased by 36.41% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in GRPN do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • GROUPON INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, GROUPON INC continued to lose money by earning -$0.10 versus -$0.38 in the prior year. This year, the market expects an improvement in earnings ($0.18 versus -$0.10).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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