Brean Capital initiated coverage on Groupon Inc (NASDAQ:GRPN) shares with a research note on Tuesday. The equity research firm assigned a Buy rating to the stock.
A rough year for Groupon so far
Several other analysts have also recently assigned ratings for Groupon. Evercore partners downgraded shares from an Equal weight to a Sell rating in a research note published on October 10th. They have assigned a price target of $5.50 to the stock. The analysts at Zacks maintained their Neutral rating on the stock in a research note issued on September 25th, and assigned a price target of $7.00. Separately, RBC Capital upgraded Groupon from an Underperform to a Sector Perform rating on September 2, and also assigned price target of $6.00 on the stock.
Groupon has not had a good year so far, as shares of the company have lost almost half their value. The daily deal company has not generated enough profits on a regular basis, which is the primary reason for the weak performance of the company, according to a report from Motley Fool by Bob Ciura.
Sales rising, but not profits
Even though sales have increased significantly over the last few months, the stock has not performed well. Groupon Inc (NASDAQ:GRPN) is investing aggressively in new categories and international markets to add to future top line growth.
Groupon acquired Ticket Monster for $260 million in a cash and stock deal to penetrate Korea, moving forward its plans for expansion in Asia. The company tried to expand into the retail goods category and has also acquired the U.S.-based woman’s fashion site Ideeli. Sales surged considerably on account of these two acquisitions. Ticket Monster sales contributions increased gross billings by 133% in the first-half for Groupon Inc’s ‘Rest of World’ operating segment.
Sales for the last quarter came in solid, but the investors are worried because of the company’s incapability to generate profits consistently. Moreover, as a result of acquisitions, the expenses of the company have also surged surged. In the first-half of the year, net loss per share increased more than four times from $0.02 per share to $0.09 per share.
In morning trading on Wednesday, Groupon Inc (NASDAQ:GRPN) shares were up 0.16% to $6.23, while year to date shares are down over 45%.