Groupon Inc (NASDAQ:GRPN) continues to be viewed as a turnaround story by analysts at Sterne Agee. They believe the company is well positioned to receive big benefits from two major trends they see occurring in the ecommerce sphere. Analysts Arvind Bhatia and Brett Strauser have increased their price target for Groupon from $9 to $12 per share and continue to rate it as a Buy.

Groupon

Groupon has a greater addressable market

In a report issued to investors this week, the analysts said they’re basing their increased price target on their 2015 estimates rather than 2014 estimates. They’re assuming a slight expansion in Groupon’s earnings multiple from 12 times to 13 times.

They believe Groupon Inc (NASDAQ:GRPN) has a greater addressable opportunity and that the company’s potential to grow its billings is greater than most realize. They do admit that there’s significant volatility in the company’s quarterly trends, although they believe that the company is still going to be a turnaround story.

Groupon’s next report due tomorrow

The daily deals company is scheduled to release its June quarter results after closing bell tomorrow. Sterne Agee analysts will be looking at a few key parts of those results. They expect to see second quarter billings to accelerate to 9 percent year over year, compared to 4 percent in the first quarter. They’re predicting that billings in North America will drive this increase and post a 21 percent increase that’s partially offset by a 1 percent billings decline internationally.

For overall revenue, they’re expecting to see a 6 percent year over year increase, including a 28 percent increase in North America and a 13 percent decline internationally.

Mobile customers are important to Groupon

The analysts believe that Groupon Inc (NASDAQ:GRPN) is especially well positioned to take advantage of the mobile web trend. They note that mobile customers spend at least 50 percent more than desktop customers, so the mobile transition is a net positive for the company and an important driver of growth in the future.

The company reported that 45 percent of its transactions in North America during March were on mobile devices, compared to 30 percent in March of last year. They’re expecting to see this mix shift to mobile transactions continue to rise.