Shares of Internet company Groupon (GRPN) rose 9.4% to close at $3.14 on December 26. Groupon stock has generated a return of -38% since the start of 2018. It’s fallen close to 17% since October and has risen 2.3% this month.
The stock is trading 44% below its 52-week high of $5.65.
Of the 18 analysts covering Groupon, five have given it “buys,” eight have given it “holds,” and five have given it “sells.” The average 12-month stock price target for Groupon is $4.07, indicating a potential upside of 30% from its current level.
Groupon’s sales are expected to fall over the next two years as it completes its exit from international and loss-making markets. The company is now focusing on domestic markets, particularly in North America, with a focus on improving its profit margins.
Groupon’s EPS are expected to rise at a compound annual growth rate of 33.3% over the next five years. The company’s operating margin is expected to expand from 5.4% in 2017 to 6.5% in 2018, 6.9% in 2019, and 8.4% in 2020.
Its net margin could expand from 0.05% in 2018 to 2.4% in 2019 and 3.4% in 2020.