Analysts expect roughly flat quarter for Groupon Groupon’s battered stock could get a boost if its second quarter results are even a little better than expected. The leading daily deals site reports earnings after trading closes Monday afternoon, and most analysts expect the company to report revenue roughly in line with the company’s guidance, but lower income. “We expect a relatively in-line second quarter for Groupon, with some risk potential as a result of foreign-exchange headwinds,” William Blair Company LLC analyst Ralph Shackart wrote in a research note. We believe there was likely some foreign exchange rate impact as a result of the decline of the euro in the quarter.” Analysts polled by FactSet predict revenue of around $575 million and adjusted net income of $20.3 million, compared to Groupon’s first quarter guidance of revenue between $550 million and $590 million and income from operations between $25 million and $45 million. Analysts say a flagging economy combined with ongoing Eurozone trouble could continue giving CEO Andrew Mason heartburn in the near future. “We’re looking for numbers in the quarter in line or slightly below,” said Arvind Bhatia, analyst at Sterne Agee Leach. “Near-term, we’re cautious.” “Groupon is overexposed to the European consumer and has seen its international growth slowing; the company has yet to roll out in those markets many of the new products and technologies that have driven US reacceleration,” Goldman Sachs analyst Heath Terry wrote in a recent note. One of its newer offerings, Groupon Goods, is another potential trouble spot for the company. Evercore Partners LLC analyst Ken Sena wrote last month that Goods were distorting the company’s true revenue picture. Sena downgraded the stock and lowered his price target from $17 to $9, based on this as well as weaker billings data. He also called for Groupon to segment out Goods revenue in the future. “Given that first party sales transactions assume inventory risk in addition to driving higher revenue contribution, as they are booked gross vs. net, we see the need for greater transparency,” he wrote. “Even at current valuation, the risk associated with shares balances the potential reward.” But some outlooks for Groupon’s stock reflect a longer-term sense of optimism. Citi analyst Mark Mahaney has a $19 price target, and Jeffrey Houston, an analyst at Barrington Research, has a $17 price target on the stock. “There is reasonable evidence that Groupon is delivering to Merchants profitable and loyal customers,” Mahaney wrote in a recent research note. This will be Groupon’s third quarterly report since going public last fall with a share price of $20.
As of midday Monday, the stock was trading around $7.75. “I think the stock has been way too beat up,” said Barrington Research’s Houston. “It’s fairly common that people are still trying to figure out how to value it.” The Groupon Income System You Too Can The Groupon Income System You Too Can Exploit A Multi-million Dollar Groupon... Consumer and merchant surveys conducted by Citi indicate that merchant satisfaction has increased, and 89 percent of those who ran a Groupon offer said they would do so again, a slight decline from the 91 percent in an earlier survey, but still a very positive sign, Mahaney said. Among consumers, Groupon gained market share in the daily deal arena; Mahaney speculated that the company could be growing its “share of user-wallet.” Groupon’s big silver lining is that a poor economy makes couponing more appealing to both consumers and businesses. “If we’re going into a tougher economy, couponing should retmain popular,” Bhatia said, which could help offset the economy’s negative effect on demand. More money and business news: No fair! Weak economy leads to adult sibling rivalry At $47M, home is most expensive ever sold in Miami Consumers getting a better handle on debt Video: Postal service reports $5.2 billion loss Sign up for our Business newsletter Follow NBCNews.com business on Twitter and Facebook
Analysts expect roughly flat quarter for Groupon
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Published on Aug 17, 2012