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Groupon Stock Tanks after 4Q17 Earnings

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Stock fell 23.3% in February 2018

Groupon (GRPN) saw its stock fall 23% in February 2018. The firm has generated returns of 1.2% in the trailing 12-month period after rising significantly by 54% in 2017. Groupon is currently trading at $4.28, which is 48% above its 52-week low of $2.9 and 29% below its 52-week high of $5.99. In comparison, Yelp (YELP) and eBay (EBAY) generated returns of -1.3% and 4.8%, respectively, in February 2018.

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Groupon announced its 4Q17 earnings last month and reported revenue of $873.17 million with non-GAAP EPS (earnings per share) of $0.07. While Groupon reported revenue above analyst estimates, analysts expected the firm to post EPS of $0.09. Groupon saw a YoY rise in active customers in domestic and international markets in the quarter ended December 2017.

Groupon expects revenue to fall in fiscal 2018

Groupon estimated revenue of $2.6 billion in fiscal 2018, a fall of 8.5% YoY compared to revenue of $2.8 billion in fiscal 2017. Revenue also fell 6% YoY in 2017. This guidance drove the company’s stock down, as analysts initially expected the firm to post revenue of $2.9 billion in 2018. This has now been revised down to $2.6 billion.

Groupon’s operating margin was 5.4% at the end of 2017. This is expected to rise to 6% in 2018, 7.3% in 2019, and 7.9% in 2020. Analysts also expect the firm’s revenue to rise to $2.69 billion in 2019 and $2.71 billion in 2020.

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