We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Groupon (GRPN) Stock Down on Weak Holiday Season Sales
Read MoreHide Full Article
Shares of Groupon Inc. (GRPN - Free Report) fell 4.86% to close at $3.33 on Dec 29, its lowest level since Jul 6, 2016. The decline apparently reflected weak holiday season sales amid increasing competition in the deals market. We also note that the current stock price reflects almost 44% decline from the peak of $5.94 that Groupon reached on Aug 9.
Year 2016 has not been a great one for Groupon. The company hit a 52-week low of $2.15 on Feb 11. However, the stock rebounded significantly (29% on Feb 12) following better-than-expected fourth-quarter 2015 results. Back-to-back strong results in the first- and second-quarter of 2016 helped the stock to grow steadily.
Over the next nine months (precisely from Feb 12 to Oct 26), Groupon shares surged 82% as compared with the Zacks Electronic Commerce industry’s gain of 53.3%. However, the stock lost momentum post its unimpressive third-quarter 2016 results. Moreover, the company’s decision to acquire competitor LivingSocial didn’t impress investors.
Shares plunged 22% on Oct 27 following the results. We note that over the next two months Groupon shares fell 36.7%. On a year-to-date basis, the stock’s return of 8.47% is now slightly lower than the S&P 500’s gain of 9.55%.
Will Shares Rebound in 2017?
Groupon belongs to the e-commerce industry that has not performed per expectations in 2016. The industry has gained 7.2% compared with the S&P 500’s return of 8.5% on a year-to-date. However, strong growth prospects are expected to help the industry rebound in 2017. (Read More: Can Ecommerce Stocks Rebound In 2017?)
We believe that strength in customer acquisition and investment in developing the shopping (Groupon Goods) business will boost Groupon’s local core business growth. The shopping business has also being restructured with the lower-margin (specifically empty calories products) products being de-emphasized to increase focus on higher-margin healthy food offerings.
Moreover, the strategic decision to exit non-core markets is a positive. The company now operates in 26 countries across the globe, down from 47 countries that it operated in the beginning of 2015. Groupon further plans to exit 11 non-core countries going ahead.
Additionally, Groupon has increased its marketing spend, which should boost business to a great extent in the long run.
At present, Groupon carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology space are Stamps.com Inc. , sporting a Zacks Rank #1 (Strong Buy) and boohoo.com plc (BHOOY - Free Report) and Ctrip.com International Ltd. , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Notably, the consensus estimate for Stamps.com’s current year has remained stable at $6.53 over the last 30 days.
The consensus estimate for boohoo.com’s current year has improved to 44 cents from 43 cents over the last 30 days.
Last but not the least, the consensus estimate for Ctrip.com’s current year has narrowed down to a loss of 65 cents from 74 cents over the last 60 days.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Groupon (GRPN) Stock Down on Weak Holiday Season Sales
Shares of Groupon Inc. (GRPN - Free Report) fell 4.86% to close at $3.33 on Dec 29, its lowest level since Jul 6, 2016. The decline apparently reflected weak holiday season sales amid increasing competition in the deals market. We also note that the current stock price reflects almost 44% decline from the peak of $5.94 that Groupon reached on Aug 9.
Year 2016 has not been a great one for Groupon. The company hit a 52-week low of $2.15 on Feb 11. However, the stock rebounded significantly (29% on Feb 12) following better-than-expected fourth-quarter 2015 results. Back-to-back strong results in the first- and second-quarter of 2016 helped the stock to grow steadily.
Over the next nine months (precisely from Feb 12 to Oct 26), Groupon shares surged 82% as compared with the Zacks Electronic Commerce industry’s gain of 53.3%. However, the stock lost momentum post its unimpressive third-quarter 2016 results. Moreover, the company’s decision to acquire competitor LivingSocial didn’t impress investors.
Shares plunged 22% on Oct 27 following the results. We note that over the next two months Groupon shares fell 36.7%. On a year-to-date basis, the stock’s return of 8.47% is now slightly lower than the S&P 500’s gain of 9.55%.
Will Shares Rebound in 2017?
Groupon belongs to the e-commerce industry that has not performed per expectations in 2016. The industry has gained 7.2% compared with the S&P 500’s return of 8.5% on a year-to-date. However, strong growth prospects are expected to help the industry rebound in 2017. (Read More: Can Ecommerce Stocks Rebound In 2017?)
We believe that strength in customer acquisition and investment in developing the shopping (Groupon Goods) business will boost Groupon’s local core business growth. The shopping business has also being restructured with the lower-margin (specifically empty calories products) products being de-emphasized to increase focus on higher-margin healthy food offerings.
Moreover, the strategic decision to exit non-core markets is a positive. The company now operates in 26 countries across the globe, down from 47 countries that it operated in the beginning of 2015. Groupon further plans to exit 11 non-core countries going ahead.
Additionally, Groupon has increased its marketing spend, which should boost business to a great extent in the long run.
GROUPON INC Price and Consensus
GROUPON INC Price and Consensus | GROUPON INC Quote
Zacks Rank and Key Picks
At present, Groupon carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology space are Stamps.com Inc. , sporting a Zacks Rank #1 (Strong Buy) and boohoo.com plc (BHOOY - Free Report) and Ctrip.com International Ltd. , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Notably, the consensus estimate for Stamps.com’s current year has remained stable at $6.53 over the last 30 days.
The consensus estimate for boohoo.com’s current year has improved to 44 cents from 43 cents over the last 30 days.
Last but not the least, the consensus estimate for Ctrip.com’s current year has narrowed down to a loss of 65 cents from 74 cents over the last 60 days.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>