Groupon Inc (NASDAQ:GRPN) is having a great year despite the fact that until last week the company, started on its daily deal business, has been a bit rudderless given the sacking of Andrew Mason. Mason was a dynamic, young and iconic CEO who horribly managed the company prior to its IPO. An accounting scandal was followed by the resignation of its COO at the same time that employees sued Groupon citing work conditions.
Since February, when Mason was given his walking papers, the company has been jointly run by Erik Lefkofsky and Ted Leonis. Lefkofsky was the original investor in Groupon and Leonis remains chairman of the board. Under their leadership, the company’s stock has risen 70% over the last few months, and the appointment of Lefkofsky, combined with solid earnings results, sent shares up an additional 20% recently.
Groupon Inc (NASDAQ:GRPN) numbers look good, but international growth and stability are a concern
Despite these recent positives, Groupon remains challenged and a Market Perform stock for Jeff Houston, CFA of Barrington Research. This week, Groupon reported earnings per share in line with the consensus number and outperformed The Street’s revenue projections. However, the company pulled back its guidance numbers for the upcoming quarter.
Houston recently summarized Groupon’s most recent quarterly numbers and found reason for both optimism and trepidation.
Groupon Inc (NASDAQ:GRPN) enjoying amazing growth in mobile use
Groupon Inc (NASDAQ:GRPN) presently has 42.6 million active users which is up 13% year-over-year. Its movement in the mobile arena is promising as Groupon continues its shift to pull vs push technologies. The emails that users receive and many find to be “too much” now account for less than 40% of Groupon’s billings. Mobile use accounted for 50% of deals sold in June, up from 30% last June.
Presently, North America represents 50% of Groupon Inc (NASDAQ:GRPN)’s revenues while the rest of the world accounts for the rest. This is worrisome to Houston who feels that Groupon must see more growth internationally. Year-over-year international revenue fell 27% shy of last years mark, and that remains a major concern as Europe continues to struggle.
While Mr. Houston seems to feel that Groupon Inc (NASDAQ:GRPN) will continue to benefit from the leadership of Lefkofsky and Leonis, he also worries about Groupon’s lack of visibility, it’s less than consistent operations since going public, international sales as mentioned above, and finally a perceived over-optimistic nature of stockholders in a company it wants to succeed.