uploads///

Here’s How Wall Street Views Groupon

By

Updated

Morgan Stanley hikes Groupon’s price target

Several Wall Street companies have weighed in on Groupon (GRPN) since the company released its 4Q17 results back in February. Morgan Stanley (MS) is one of them. The investment banking company upgraded its rating for Groupon stock to “equal-weight” from “underweight,” saying that investors should focus on how Groupon is improving its profitability because that’s currently the focus of the company’s management. Additionally, Morgan raised its price target on Groupon to $4.40 from $4.30, saying that the post-earnings sell-off in the stock had been overdone.

Article continues below advertisement

Groupon guided for earnings below estimates

Investors dumped Groupon stock in the wake of the company’s 4Q17 earnings announcement, in which it missed expectations. Investors were also disappointed by Groupon’s tepid guidance for 2018. Groupon posted adjusted EPS (earnings per share) of $0.07 in 4Q17, while Wall Street was expecting EPS of $0.09.

Groupon has guided for adjusted EBITDA of $260 million–$270 million in 2018, below the consensus estimate of $277 million. In 4Q17, Groupon’s revenue fell 4.0% YoY (year-over-year), and its gross profit rose 10% YoY.

Cowen maintains rating and price target

Wall Street company Cowen views Groupon’s future positively, despite the recent earnings miss and weak guidance. The company maintained its “market perform” rating and $5.50 price target for Groupon, citing data showing positive trends and consistent consumer purchasing from Groupon.

Overall, Wall Street has recommended “hold” for Groupon stock, as well as Yelp (YELP). Amazon (AMZN), eBay (EBAY), and Alibaba (BABA) have all received “buy” ratings.

Advertisement

More From Market Realist