NEW YORK (TheStreet) -- Shares of Groupon (GRPN) were falling 3.3% to $5.83 on heavy trading volume Wednesday morning following the resignation of the online coupon company's CFO, and despite an increase to its stock buyback program.
Groupon said that CFO Jason Child will leave the company at the end of July to relocate to the West Coast. Brian Kayman, Groupon's VP of tax and treasury, will serve as interim CFO while the company's board selects a replacement.
The company also announced that it named Rich Williams as COO. Williams currently serves as the president of North American for Groupon.
Also, Groupon announced that its board of directors approved a $200 million increase to its previously announced $300 million share repurchase program. The authorization starts immediately and will continue through August 2017.
TheStreet Ratings team rates GROUPON INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate GROUPON INC (GRPN) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GROUPON INC has improved earnings per share by 25.0% 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 -$0.09 versus -$0.14 in the prior year. This year, the market expects an improvement in earnings ($0.17 versus -$0.09).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet & Catalog Retail industry. The net income increased by 62.2% when compared to the same quarter one year prior, rising from -$37.80 million to -$14.27 million.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The gross profit margin for GROUPON INC is rather high; currently it is at 50.59%. Regardless of GRPN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -1.90% trails the industry average.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. 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.
- You can view the full analysis from the report here: GRPN Ratings Report