Groupon Inc Upgraded From Sell To Hold By Vetr

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

Groupon has been upgraded to a Hold rating from Sell by the investment analysts at Vetr, in a note issued to investors on Thursday. Vetr analysts have assigned a $7.52 price target on the stock.

Poised well for growth ahead

For 2015, Groupon is focusing on improving selections across its platform and growing the search-related transactions. In the fourth-quarter, search-related transaction rose by 26% for Groupon compared to 19% in 2013. Analysts expect the growth to continue in the coming quarters, as well. It is largely believed that the users using the search feature spend more, so, a rise in the search-based transactions would eventually mean more average revenue per user.

For the current year, the daily deal company expects the top line to grow by 15%, even though first-quarter revenue is only expected to grow between 4% and 11%. Long-term growth targets are more encouraging for Groupon, as the company expects revenue and adjusted EBITDA to grow by 20% and 25% by 2017.

Management changes at Groupon

Recently, Groupon has made few changes in management. The Chicago-based company has hired Carol Campagnolo as the senior vice president of human resources. Campagnolo was earlier employed at Des Plaines-based SGK, a marketing-technology company, as its chief of human resources.

Groupon also hired Jay Sullivan as the head of consumer products. Sullivan will report to Chief Technology Officer Sri Viswanath, and previously worked with web browser maker Mozilla as its chief operating officer.

In recent weeks, several research houses have come out with their opinion on Groupon. In a research note on Wednesday, analysts at Deutsche Bank reiterated a Buy rating on the company with a price target of $8.50. Analysts at Morgan Stanley, in a research note on February 25th, initiated coverage on Groupon with an Equal Weight rating and a $9.00 price target. Sterne Agee analysts have set a Buy rating on the stock with a price target of $12, in a research note on February 25th. Credit Suisse analysts initiated coverage on the company through a research note on February 13th, setting a Hold rating and a price target of $8. Groupon presently has an average rating of Hold and a consensus price target of $8.79.

As of 10 am EDT Friday, Groupon was up 0.39% at $7.67, and year to date, the stock is down almost 7%.

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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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