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) Q2 Earnings: Will it Pull Off a Surprise?
Read MoreHide Full Article
Groupon Inc. (GRPN - Free Report) is set to release second-quarter 2017 earnings on Aug 2. We note that the company has delivered positive earnings surprises in the preceding four quarters, resulting in an average positive surprise of 87.32%.
In the last quarter, the company reported loss of 2 cents per share compared with the Zacks Consensus Estimate of a loss of 5 cents. Revenues of $673.6 million missed the Zacks Consensus Estimate of $717.1 million and also declined 3.6% on a year-over-year basis.
Management expects EBITDA to decline sequentially as the company plans to continue its investments in marketing and offline campaigning activities. However, EBITDA is expected to increase year on year.
Notably, the company has underperformed the industry it belongs to on a year-to-date basis. While the industry gained 50.9%, the stock returned 14.5%.
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. It intends to shift its focus on local business from goods. In the first quarter, the company reduced its country presence to 15. This is anticipated to be a positive as it gives it the ability to focus more on the better performing zones.
Notably, in the last reported quarter, the company added 500K new customer in North America, thereby adding to its revenues from the region. North American gross profit also increased 2.3%.
Moreover, expansion of adjusted EBITDA margin to 6.6% and a decline in operating expenses and operating loss indicate the successful implementation of the company’s streamlining initiatives.
We believe that the shifting of Groupon Goods from a lower-margin focused business to a higher-margin business will boost profitability. However, competition from giants like eBay (EBAY - Free Report) and Amazon remains a concern.
Earnings Whispers
Our proven model does not conclusively show that Groupon is likely to beat estimates 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:
Vishay Intertechnology, Inc. (VSH - Free Report) with an Earnings ESP of +6.1% and a Zacks Rank #1.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains.
Image: Bigstock
Groupon (GRPN) Q2 Earnings: Will it Pull Off a Surprise?
Groupon Inc. (GRPN - Free Report) is set to release second-quarter 2017 earnings on Aug 2. We note that the company has delivered positive earnings surprises in the preceding four quarters, resulting in an average positive surprise of 87.32%.
In the last quarter, the company reported loss of 2 cents per share compared with the Zacks Consensus Estimate of a loss of 5 cents. Revenues of $673.6 million missed the Zacks Consensus Estimate of $717.1 million and also declined 3.6% on a year-over-year basis.
Management expects EBITDA to decline sequentially as the company plans to continue its investments in marketing and offline campaigning activities. However, EBITDA is expected to increase year on year.
Notably, the company has underperformed the industry it belongs to on a year-to-date basis. While the industry gained 50.9%, the stock returned 14.5%.
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. It intends to shift its focus on local business from goods. In the first quarter, the company reduced its country presence to 15. This is anticipated to be a positive as it gives it the ability to focus more on the better performing zones.
Notably, in the last reported quarter, the company added 500K new customer in North America, thereby adding to its revenues from the region. North American gross profit also increased 2.3%.
Moreover, expansion of adjusted EBITDA margin to 6.6% and a decline in operating expenses and operating loss indicate the successful implementation of the company’s streamlining initiatives.
Groupon, Inc. Price and EPS Surprise
Groupon, Inc. Price and EPS Surprise | Groupon, Inc. Quote
We believe that the shifting of Groupon Goods from a lower-margin focused business to a higher-margin business will boost profitability. However, competition from giants like eBay (EBAY - Free Report) and Amazon remains a concern.
Earnings Whispers
Our proven model does not conclusively show that Groupon is likely to beat estimates 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:
Kemet Corporation (KEM - Free Report) with an Earnings ESP of +11.1% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Vishay Intertechnology, Inc. (VSH - Free Report) with an Earnings ESP of +6.1% and a Zacks Rank #1.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains.
Click to see them right now >>