Groupon Inc (NASDAQ:GRPN) releases its September quarter results on Nov. 7, and analysts at Ascendiant capital Markets believe the daily deals company will post a slight miss. However, they suggest that other news may provide some near-term support for the company’s stock.

Groupon

Groupon results expected below estimates

Analyst Edward Woo’s estimate for Groupon Inc (NASDAQ:GRPN)’s September quarter revenue is $625 million, while earnings per share is estimated to be 1 cent. Consensus estimates suggest revenue of $616 million with earnings per share of 1 cent. Woo believes Groupon will miss these estimates. The company guided for revenue of between $585 million and $635 million with operating income of between -$10 million and $10 million, which Woo believes implies a loss of 1 cent per share.

According to Woo, Group on probably posted continued high growth in its Good business, but that growth might be offset by a moderate decline in the daily deals industry, which he estimates fell 10% during the September quarter.

Groupon’s metrics could be mixed

He is also expecting December quarter guidance to be a bit weak. He’s looking for revenue and earnings per share slightly below consensus estimates of $724 million and 6 cents per share. He suggests that continued declines in the daily deals industry will temper results from the December quarter. Woo also believes the September quarter results will be about as mixed as the June quarter results were.

He notes that Groupon Inc (NASDAQ:GRPN)’s annual revenue continued to decelerate during the June quarter as revenue increased 7% compared to 8% in the first quarter of the year. However, gross billings did increase 10%, compared to 4% in the first quarter. He notes that last quarter Goods also increased, rising 17% from the previous quarter and was even able to offset year over year declines of 17% in its daily deals business. Domestic revenue did grow strongly in the June quarter, climbing 45% year over year, although Groupon continues to struggle internationally. International revenue declined 25% year over year.

Good news could stabilize Groupon shares

The analyst points to recent announcements from Groupon Inc (NASDAQ:GRPN) which could stabilize the company’s shares in the event of a weak earnings report. The company announced in August that then-joint interim CEO Eric Lefkofsky would become CEO. It also said it would buy back $300 million shares.

Remaining cautious on Groupon

The analyst continues to rate Groupon Inc (NASDAQ:GRPN) as a Sell with a price target of $8 per share and said he’s still cautious on the company even though its outlook is improving slightly. Groupon has managed to stabilize and improve its domestic business and plans to follow a similar path internationally, but he thinks it has a long way to go. He also doesn’t see signs of consistency just yet and remains unsure that the company will be able to keep growing and remain profitable.