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Groupon Inc (GRPN - Analyst Report) is set to report first quarter 2013 results on May 8. Groupon reported fourth quarter loss of 5 cents wider than the Zacks Consensus Estimate 2 cents. Let’s see how things are shaping up for the upcoming announcement.

Growth Factors this Past Quarter

Although Groupon missed the Zacks Consensus Estimate, the loss was much narrower than a loss of 8 cents reported in the year-ago quarter. Revenues jumped approximately 30% from the year-ago quarter due to higher gross billing. Groupon reported an operating loss of $12.9 million, which was narrower than a loss of $15 million in the year-ago quarter.

Groupon provided a tepid outlook for the first quarter, with revenues forecast to increase in the range of $560 million to $610 million (up 0% to 9%). Groupon expects operating income to be in the range of ($10.0) million to $10.0 million for the first quarter.

Earnings Whispers?

The Zacks Consensus Estimate for the first quarter is a loss of 1 cent. For fiscal 2013, the estimate is pegged at earnings of 5 cents per share.

Groupon posted positive surprises in three of the four preceding quarters with an average positive surprise of 75.0%.There were no estimate revisions for both the first quarter and fiscal 2013 over the past 30 days. As a result, the Zacks Consensus Estimate for both periods has remained unchanged.

The chances of a big surprise are unlikely given the lack of catalysts during the quarter. The stock carries a Zacks Rank #2 (Buy).

We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Our model states that a stock needs to have both a positive Zacks Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1, #2 or #3 to beat earnings estimates. You could, therefore, consider stocks like:

Hasbro Inc (HAS - Analyst Report), Earnings ESP of +3.03% and Zacks Rank #2 (Buy)

International Game Technology (IGT - Analyst Report), Earning ESP of +3.23% and Zacks Rank #2 (Buy)

Webcom Group Inc (WWWW - Snapshot Report), Earnings ESP of +2.38% and Zacks Rank #2 (Buy)
 

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