Groupon Inc (NASDAQ:GRPN) is scheduled post its first quarter earnings after the market close today. Analysts Arvind Bhatia and Brett Strauser at Sterne Agee, in a report on May 5, 2014, say they’re expecting revenue of $725 million, compared to Wall Street estimates of $740 million and guidance of between $710 million and $760 million. Adjusted EBITDA is expected to be $35 million, compared to analyst estimates of $36 million and guidance of between $20 million and $40 million. For the first quarter, revenue will include a contribution of $50 million due to recent acquisitions.
Many catalysts going forward
Sterne Agee analysts have maintained their take on Groupon Inc (NASDAQ:GRPN) stock, referring to it as an “interesting turnaround story” and advising long-term investors to take a position because of various factors: the large addressable market, potential for turnaround, posting better than expected top-line growth and margin expansion, the possibility for better international performance after acquiring Ticket Monster, outpacing the competition, and having an attractive valuation.
Groupon Inc (NASDAQ:GRPN) has revived from the lows over the last year but had to face few bumps that took it off the road. In the fourth quarter of 2013, North American local billings growth slowed to 2% year over year and missed expectations. However, mobile surged as a percentage of revenue mix. EMEA performed well, with billings growth of 15% year over year in the segment.
Sterne Agee analysts have a Buy rating on Groupon with a price target of $12.
Mixed data points in Q1 for Groupon
RBC Capital Markets analysts Mark S. Mahaney, Rohit Kulkarni and Brian Peak, in a report dated May 5, 2014, note that Groupon Inc (NASDAQ:GRPN) has a powerful business model which closes the gap between online and offline marketing by generating demands for merchants. Also there is a large total addressable market for Groupon subscribers. The analysts also note that there is a negative cash conversion cycle in which future growth can be funded by cash generation.
For the first quarter, Groupon Inc (NASDAQ:GRPN) saw a decline in its U.S. average monthly pages viewed per unique visitor, but minutes spent per visitor increased sequentially, according to data from comScore. Pages viewed per visitor dropped marginally to 12.9, which was a decline from 13 in the fourth quarter, but they surged year over year from 12.2 in the first quarter of 2013. Minutes spent per visitor increased to 10.7 quarter over quarter from 10.1 in the fourth quarter but remained flat year over year.
RBC Capital Markets analysts have an Underperform rating on Groupon Inc (NASDAQ:GRPN) with a price target of $7.