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) to Report Q1 Earnings: What's in Store?
Read MoreHide Full Article
Groupon Inc. (GRPN - Free Report) is set to release first-quarter 2017 earnings on May 3. We note that the company has delivered positive earnings surprises in the preceding four quarters resulting in average positive surprise of 78.57%.
In the last quarter, the company reported earnings of 3 cents per share as against the Zacks Consensus Estimate of a loss of 2 cents. Revenues of $935 million also beat the Zacks Consensus Estimate of $911 million and inched up 1.9% on a year-over-year basis.
However, we note that first-quarter 2017 guidance was not positive as management expects to report lowest billings and adjusted EBITDA. Nonetheless, Groupon anticipates adjusted EBITDA to be slightly better that the year-ago quarter.
The unimpressive outlook has hurt share price momentum, which has underperformed the Zacks Electronic Commerce industry on a year-to-date basis. While the industry gained 27.7%, the stock appreciated 18.1%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Groupon continues to exit international markets as part of its restructuring plans. The exit from non-core markets is expected to aid it focus on key growth areas. The company intends to bring its country count to 15 with respect to its strategy of streamlining business.
The company’s new business strategy (with core focus on marketing, international and shopping) appears to be working. Although overall gross billings dipped slightly in the fourth quarter, billings from North America (Groupon’s core market) advanced 5.9% year over year.
Groupon added nearly 5.2 million new customers in the quarter. Further, apart from exiting non-core markets, the company reduced headcount in North America, which lowered operating loss.
We believe that the restructuring of Groupon Goods from a lower-margin focused business to a higher-margin business will boost profitability. Moreover, improving customer service and net promoter score are positive for brand value.
Groupon’s mobile application was the second most visited retail application in the U.S. in Dec, 2016 trailing only Amazon (AMZN - Free Report) according to comScore. We expect the growing adoption of the mobile application to be a strong catalyst going ahead.
Earnings Whispers
Our proven model does not conclusively show that Groupon is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: Groupon’s Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 4 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Groupon carries a Zacks Rank #3, which when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
DragonWave with an Earnings ESP of +8.82% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Impinj (PI - Free Report) with an Earnings ESP of +50% and a Zacks Rank #2.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
Image: Bigstock
Groupon (GRPN) to Report Q1 Earnings: What's in Store?
Groupon Inc. (GRPN - Free Report) is set to release first-quarter 2017 earnings on May 3. We note that the company has delivered positive earnings surprises in the preceding four quarters resulting in average positive surprise of 78.57%.
In the last quarter, the company reported earnings of 3 cents per share as against the Zacks Consensus Estimate of a loss of 2 cents. Revenues of $935 million also beat the Zacks Consensus Estimate of $911 million and inched up 1.9% on a year-over-year basis.
However, we note that first-quarter 2017 guidance was not positive as management expects to report lowest billings and adjusted EBITDA. Nonetheless, Groupon anticipates adjusted EBITDA to be slightly better that the year-ago quarter.
Groupon, Inc. Price and EPS Surprise
Groupon, Inc. Price and EPS Surprise | Groupon, Inc. Quote
The unimpressive outlook has hurt share price momentum, which has underperformed the Zacks Electronic Commerce industry on a year-to-date basis. While the industry gained 27.7%, the stock appreciated 18.1%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Groupon continues to exit international markets as part of its restructuring plans. The exit from non-core markets is expected to aid it focus on key growth areas. The company intends to bring its country count to 15 with respect to its strategy of streamlining business.
The company’s new business strategy (with core focus on marketing, international and shopping) appears to be working. Although overall gross billings dipped slightly in the fourth quarter, billings from North America (Groupon’s core market) advanced 5.9% year over year.
Groupon added nearly 5.2 million new customers in the quarter. Further, apart from exiting non-core markets, the company reduced headcount in North America, which lowered operating loss.
We believe that the restructuring of Groupon Goods from a lower-margin focused business to a higher-margin business will boost profitability. Moreover, improving customer service and net promoter score are positive for brand value.
Groupon’s mobile application was the second most visited retail application in the U.S. in Dec, 2016 trailing only Amazon (AMZN - Free Report) according to comScore. We expect the growing adoption of the mobile application to be a strong catalyst going ahead.
Earnings Whispers
Our proven model does not conclusively show that Groupon is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: Groupon’s Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 4 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Groupon carries a Zacks Rank #3, which when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
DragonWave with an Earnings ESP of +8.82% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Impinj (PI - Free Report) with an Earnings ESP of +50% and a Zacks Rank #2.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
See today's Zacks "Strong Sells" absolutely free >>.