Groupon Inc Insider Selling: CEO Sells 454,166 Shares

Groupon earningsBy GrouponRUS (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Groupon CEO Eric P Lefkofsky offloaded 454,166 shares in an open transaction on March 13. Lefkofsky sold the stock at an average price of $7.87 per share for a total value of around $3.6 million. Post-transaction, the CEO now directly owns 631,455 shares in the company valued at approximately $5 million, according to a document filed with the SEC.

Solid Q4 for Groupon

For the fourth quarter of 2014, Groupon posted solid earnings as its top line growth surged 20%, which was ahead of the market estimates. Market watchers appreciated the performance, which spiked the stock by over 10%.

Many analysts have released their verdicts on Groupon in recent months. Morgan Stanley analysts initiated coverage on the stock, assigning it an Equal-Weight rating in a research note on Wednesday. Groupon has been assigned a price target of $9 by Morgan Stanley. Sterne Agee analysts gave a Buy rating to the stock and assigned it a price target of $12 in a research note to investors on Feb. 25. Credit Suisse analysts started coverage on Groupon in a research note on Feb. 13 and assigned a Hold rating to the stock with a price target of $8. Separately, analysts at RBC Capital assigned a Sector Perform rating to the stock and raised their price target to $8 from $7 in a research note to investors on Feb. 13. Groupon presently has an average rating of Hold and a consensus target price of $8.83.

What lies ahead for Groupon?

Groupon expects its top line to rise 15% in 2015, while revenue growth is expected to be between 4% and 11% during the first quarter of 2015. Also the long-term outlook of the company is more optimistic, with revenue and adjusted EBITDA growth targets estimated over 20% and 25%, respectively, by 2017.

Analysts at Trefis believe Groupon’s growth will be driven by mobile-related transactions in the future. Simultaneously, the company is gaining greater market share with its “pull” strategy, and stabilization in the email-related business will push up demand in the future. Groupon has been able to show decent growth across geographies and categories, and the Trefis team expects the company to continue with its growth story.

On Monday, Groupon shares closed up 0.64% at $7.82, while year to date, the stock is down almost 5%.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at [email protected]

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