Groupon Inc (NASDAQ:GRPN) is expected to post its third quarter results in-line with the guidance of management, says a report from Sterne Agee by analysts Arvind Bhatia and Brett Strauser. However, the analysts also believe that there are some risks regarding the revenue estimates of $615 million, but the company will be able to perform in line or over the non-GAAP operating income expectation of $41 million.
In their research report, the Sterne Agee analysts have recommended the share for long term investors.
Plenty of opportunities in coming quarters
Europe, according to the report, is “beginning to bottom,” which will help Groupon’s EMEA segment in the coming future. Management will be occupied with ROW, which is “collectively a drag on earnings,” and will start paying off in forthcoming quarters. From the competition point of view, the analysts feel that Living Social might give to Groupon a run for its money.
Though Groupon Inc (NASDAQ:GRPN) is witnessing increasing instability in present quarters, in coming quarters, opportunities are plenty and the capacity of Groupon to grow billings is higher than expected.
Groupon Q3 estimates
Groupon Inc (NASDAQ:GRPN) will report its September quarter results after the market closes on November 7. Revenue and non-GAAP earnings are expected to come in at $600 million and $33 million respectively compared to the consensus estimate of $615 million and $41 million, and company guidance of $585-$635 million and $20-$40 million respectively. Full-year GAAP EBIT guidance is expected to be maintained at more than $100 million, believe analysts.
Billing for the third quarter is expected to grow 11% year on year compared to 10% year on year accelerated by a 23% rise in North America billings and 1% in international billings. Revenue is expected to increase 6% year on year for the third quarter, which will be marginally below the second quarter’s 7.1% growth year on year. North America is expected to earn higher revenue by 27% year on year while international revenue is estimated to be down 17% year on year.
North America billing to grow
Local gross billing for North America is expected to grow 13% year on year. Goods billings are forecasted to come down 11% sequentially, whereas Travel is estimated to increase 3% sequentially. Total North America billing is expected to go up 23% year on year, which will be down only by a whisker from the second quarter’s 30% year on year.