Groupon reported better-than-expected first quarter results. Quarterly revenue of $559.3 million soared 89.0% year over year, driven by higher gross billing and steady increase in the number of active customers.
Earnings estimates provided by Zacks
The consensus estimate has risen from three months ago when it was a loss of 3 cents. It hasn’t been adjusted since. For the fiscal year, analysts are expecting a loss of one cent per share. Analysts are projecting that revenue will stay flat at $574.2 million this quarter. For the year, revenue is projected to come in at $2.39 billion.
The majority of analysts think investors should stand pat on Groupon, with 11 of 18 analysts rating it hold. Analysts have become more cautious about the stock in the last three months
according to data compiled by Thomson Reuters.
Groupon Inc. (Nasdaq: GRPN) is a local e-commerce marketplace that connects merchants to consumers by offering goods and services at a discount. The company has a market capitalization of $4.3 billion. It is expected to report FY2012 second-quarter EPS of 3 cent on revenue of $573.13 million. Groupon turned a profit in the first quarter, making 2 cents a share on revenue of $59.28 million. Groupon is trading around $6.65 a share, which is 67 percent off its initial public offering price of $20 last November.
Recommendation
We believe that Groupon is well positioned to gain from increasing e-commerce spending on mobile devices, profitable domestic market and an under penetrated international market. We expect these opportunities to continue to drive top-line growth going forward. Moreover, Groupon enjoys a first-mover advantage in the daily deals market based on its well-recognized discount coupons.
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