Groupon Inc (NASDAQ:GRPN) revealed its earnings numbers for the third quarter of the year this afternoon after the market closed on Wall Street. The company showed earnings per share of $0.02 for the three months through September on revenue totaling $595.10 million. On today’s market shares in Groupon trended down and finished the day at $9.55.
In the run-up to the announcement of this earnings report analysts were expecting a slim profit at Groupon Inc (NASDAQ:GRPN). 23 analysts surveyed by Bloomberg were looking for earnings per share of 1 cents from the company by consensus. Groupon earnings appear to have stabilized in recent months, but the company’s valuation makes the shares less than safe.
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Groupon Inc (NASDAQ:GRPN) managed to earn 3 cents per share on revenue of $569 million in the same three months of 2012. The company’s earnings have not always lived up to expectations, and the massive value the company was attributed on IPO has caused a fall in the value of the stock on those poor earnings numbers.
Things have been looking up for Groupon Inc (NASDAQ:GRPN) in 2013, however. The company’s management has made the market believe in their plans for the future of the company, and they have inspired some faith in their ability to bring the company to real earning power.
Groupon Inc (NASDAQ:GRPN) shares have benefited from several trends in 2013. Internet stocks have become more attractive after the cloud of Facebook Inc (NASDAQ:FB) departed. The stock market as a whole has been up through 2013 on the back of Federal Reserve investment, and Groupon earnings have managed to impress the market.
Since the start of 2013 shares in Groupon Inc (NASDAQ:GRPN) have risen in value by close to 100%. The near doubling in the value of the company has massively changed the risk / reward dynamic associated with it. There are positive trends at Groupon, but the company is valued at more than $6 billion. It doesn’t make enough money to justify that right now.
Shareholders in Groupon Inc (NASDAQ:GRPN) will be paying close attention in the earnings call the company will host at 5 PM EST. The company is likely to discuss its outlook for the fourth quarter of the year in the course of the call, and investors will want to hear about management’s strategy for the year ahead.