Groupon stock is still tumbling today, marking the second day of declines after Thursday’s troubling earnings report. Analyst reports are mixed with RBC Capital Markets downgrading the stock and Jefferies actually raising its price target.

Groupon Inc Stock In Freefall As RBC Downgrades It

Groupon downgraded to Underperform

In a report dated May 1, RBC analyst Mark Mahaney and team cited “deteriorating fundamentals” for their decision to downgrade Groupon from Sector Perform to Underperform. They also slashed their price target from $4 to $3 per share.

At the headline level, the company posted solid results with beats on revenue and EBITDA at $732 million and $31 million, respectively. The RBC team noted that management is making some progress on their core goals, although they believe the traction is going very slowly. Groupon also reaffirmed its full-year sales guidance of $2.75 billion to $3.05 billion, although it increased its EBITDA guidance to a range of $80 million to $130 million.

Concerning trends at Groupon

However, Mahaney is concerned because of the downward trends in gross billings. Total gross billings fell 3% year over year to $1.5 billion in the first quarter, compared to the fourth quarter’s 4% increase. In North America, billings growth decelerated to 5%, compared to the fourth quarter’s 11% growth rate, even though the comparison was easier by six points. It also decelerated compared to last year’s growth in the mid-teens to low double digits.

Groupon’s revenues also declined 1% year over year, compared to the fourth quarter’s 9% growth rate. The RBC analyst added that although the company added more active customers in North America than it has in eight quarters, most of that was because of the huge increase in marketing spend.

Still room to improve

Jefferies analyst Brian Pitz increased his price target for Groupon stock from $3 to $3.50 per share but maintained his Hold rating. His big concern is that the company is still a work in progress, so he still thinks investors should wait and see what happens with it.

The Motley Fool notes that one big problem with last week’s report was that although Groupon beat expectations for revenue in the first quarter, management did not increase their revenue outlook to add that extra revenue from the first quarter. In other words, they don’t exactly exude confidence that things are getting better there.

The post also notes that while Groupon generates plenty of cash, its 12-month trailing free cash flow plunged to $73 million, falling from $171 million at the end of last year, $207 million at the end of 2014, and $289 million at the end of 2013.

Groupon stock declined by as much as 3.59% to $3.48 per share in intra-day trading on Monday.