Has Groupon Inc (GRPN) Hit Rock Bottom? Here’s What To Expect From Its Q4 Earnings by Estimize
Groupon Inc (GRPN) Consumer Discretionary – Internet & Catalog Retail | Reports February 11, After Market Closes
Groupon’s Q4 Earnings – Key Takeaways
- The Estimize consensus is calling for EPS of $0.01 and revenue of $843.96 million, slightly higher than both Wall Street and company guidance
- Groupon recently appointed a new CEO who outlined three focus areas for leading the company to growth: marketing, international expansion and shopping
- Shares of Groupon are currently hovering around 3 dollars, so the company has no wiggle room to miss its numbers tonight.
- What are you expecting for GRPN? Get your estimate in here!
Groupon is scheduled to report fourth quarter earnings February 11, after the bell. Despite beating on the bottom line in the past 3 quarters, Groupon has been unable to establish market share in its core business. The company recently appointed a new CEO who outlined three focus areas for leading the company to growth: marketing, international expansion and shopping. While Groupon is primed to benefit from these trends in the long run, it will have no bearing on how the company reports tonight. As a result, the Estimize consensus is calling for EPS of $0.01, just a penny higher than the Street, and revenue of $843.96 million, roughly $3 million above the Wall Street consensus. Compared to Q4 2014, this projects a YoY contraction in EPS and revenue of 81% and 8%, respectively. Despite modest third quarter earnings, the Estimize community has been more bearish on Q4 earnings. In the past three months, Estimize users have cut EPS estimates by 12% and revenue by 2%.
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The ongoing restructuring activities under new leadership is expected to come at the expense of shareholders. The company is shifting its strategy from a deal business to a local marketplace focusing on marketing, international expansion and shopping. This reorganization will weigh heavily on financials in the near term and has been a cause of plunging stock prices. Marketing initiatives, which had been neglected in the past, are now a strategic focus as GRPN attempts to stimulate brand awareness. Moreover, stiff competition from the likes of Amazon and waning macroeconomic conditions pose a serious threat to Groupon’s profitability. Recently, Groupon issued weak Q4 guidance pointing to declining gross billings and increasing costs of restructuring activities. With shares trading at less than $3 a share, Groupon has no wiggle room to miss its numbers tonight. Any positive surprise could give the stock a much needed boost.
Do you think GRPN can beat estimates? There is still time to get your estimate in here!