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While macroeconomic and geopolitical challenges mount and the rate hike serves as a double whammy for the industry, impacting both providers and consumers, the ecommerce market continues to grow through innovation, technology and insight, as it continues to take away slices of the total retail pie. Commerce Department numbers are proof of this trend: ecommerce sales in the second quarter of 2026 grew 12.2% over the second quarter of 2025 (3.8% sequentially), with total retail sales increasing 6.7% (2.9% sequentially). Ecommerce accounted for around 17.1% of total U.S. retail sales.
A point to note here is that consumers are increasingly blending their online and offline shopping experiences, so this distinction may ultimately become irrelevant. As a corollary, it is those retailers that have the capacity to sell through both channels that will be able to compete tomorrow.
While ecommerce continues to take share from traditional retail, the pace has moderated. Additionally, geopolitics is a major challenge for ecommerce players at the moment -- given the wars, tariffs and tensions between nations today that are disrupting supply chains, increasing costs and reducing efficiencies.
This creates a highly competitive environment where growth comes mainly from price competition and share gains. Offsetting these negatives is the adoption of AI technology, which promises to lower barriers for smaller players while generating efficiencies in customer acquisition, operations and marketing.
Our picks Commerce.com (CMRC - Free Report) and Groupon (GRPN - Free Report) are doing precisely that. Commerce has a number of growth opportunities. Its ecommerce technology solutions place it at the heart of the shift from physical to digital, with its innovation engine, B2B focus, cross-selling possibilities and payments product expected to provide a long growth runway. Cost reduction initiatives slated for 2027 will ensure improved profitability going forward.
Groupon should benefit from its local focus, as the international business remains strong and North America is also turning the corner. The company has also implemented restructuring actions that will improve profitability in the quarters ahead. Both companies are using AI to improve their sales outcomes and generate operational efficiencies.
The convenience of online shopping (particularly through mobile devices) remains the top reason for ecommerce volumes, along with the merging of physical and digital channels. Gen-Z is the biggest driver, which is, increasingly, the more relevant demographic.
Many of these buyers have grown up on the Internet and are accustomed to a high level of digitization. They are also likely to hang out on popular social media platforms, allowing themselves to be influenced by the latest trends there. This is driving an entirely different perspective on the ecommerce space, one that revolves around digital influencers and appears to be expanding with more advanced technology such as AR/VR, social commerce and generative AI.
About the Industry
Internet - Commerce refers to all economic activity (B2B, B2C, C2C, DTC) through websites, mobile apps, online marketplaces and social commerce platforms. It therefore continues to evolve as the technologies driving it advance, whether on the consumer side or the platform provider side, increasingly including a combination of chatbots, AI and social media, as well as payments and checkout systems, digital marketing, logistics and fulfillment, cross-border trade, and customer data/analytics tools.
Differentiation comes from better technology for improved showcasing, range, easier navigation and payment, speedier delivery and returns, brand building, comparison shopping, loyalty, etc. as well as good customer service and more (and free) shipping options, which generally tip the scales in favor of larger players.
Factors Driving the Internet-Commerce Industry
Macroeconomics and geopolitics do not favor the industry right now. The macroeconomic environment is not conducive, with players shifting focus to efficiency and profitability rather than growth. Elevated inflation has reduced consumers’ real purchasing power, leading to weaker discretionary spending and a greater focus on essentials, discounts and value-driven purchases. At the same time, rising interest rates keep borrowing costs for both consumers and companies elevated, affecting both the production and consumption sides of the equation. Consumer confidence about the current business and labor market conditions continues to soften and consumption is still being driven largely by inflation. The pressure on conversion rates is seen from basket sizes, while rising labor, logistics and warehousing costs continue to squeeze margins. Companies are prioritizing cost control, automation and higher-margin revenue streams such as advertising and subscriptions to sustain profitability in a slower-growth environment. Geopolitics is simultaneously reshaping the industry by disrupting the global infrastructure that e-commerce depends on. Trade tensions, tariffs and regional conflicts are increasing the cost of goods and creating volatility in supply chains, leading to delays, stock shortages and higher shipping expenses.
Competition is heating up. Today, an acceptable marketplace is one that offers low prices, fast or free shipping, hassle-free returns and a seamless omnichannel experience. Yet, because it is so easy to switch platforms, customer loyalty is hard to pin. Therefore, players increasingly find that mere online presence isn’t enough. They must strive for operational excellence, differentiated customer experiences, efficient logistics and disciplined capital allocation in order to stay in business. While there is a place for specialized niche operators that can differentiate themselves properly, larger players like Amazon pull in much higher traffic because of larger networks of buyers and sellers that make the platform more attractive for both sides, as well as logistics, AI and other assets that they can create and deploy more effectively.
AI is shaping up to be one of the major enablers of ecommerce because it transforms e-commerce from a generic marketplace into a highly customized, data-driven ecosystem that boosts both revenue growth and profitability. Companies can leverage AI for demand forecasting, targeted advertising, dynamic pricing and personalized product recommendations, significantly improving conversion rates and average order value. On the operational side, it helps optimize inventory and supply chains among other things, reducing costs and enabling efficient deliveries. With agentic commerce, LLM models like ChatGPT recommend products, compare features and complete the sale. As a result, customers get increasingly comfortable with the superior recommendations and personalization this offers. Adobe estimates that traffic to retail sites from generative AI tools was up 693.4% year over year in the 2025 holiday season. There may be two outcomes however, the first being the lowering of boundaries so smaller and niche players can offer experiences comparable to larger players and the second being the possibility that retailers may lose direct traffic, customer data and some control over the shopping relationship.
The total retail experience between physical and digital continues to blur as most consumers blend their online and offline activities. Physical stores are increasingly experience centers allowing the traditional touch and feel that many customers prefer. Some also like to walk out with their purchase. Also, any experience that increases the speed of delivery/pickup is preferred. This may include increased reliance on robots, self-driven delivery vehicles and drones that could ease bottlenecks and make deliveries smoother and cheaper.
·A leading trend is Gen-Z popularizing social commerce. Social commerce means the ability to discover, research and complete the purchase of products and experiences on a social media platform. Consumers shift from intent-based search to content-driven discovery while scrolling through short videos, influencer content or live streams on platforms. The key advantage is that these platforms combine entertainment, advertising and commerce, which significantly increases impulse buying.
Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1. So the group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates negative near-term prospects.
Ecommerce being in the bottom 50% of Zacks-ranked industries is the result of its relative performance versus others. What we’re seeing in the aggregate estimate revisions for 2026 is a more or less steady decline until March this year, followed by a gradual recovery through September and a significant decline in October. The 2027 estimate follows the same general trend but the recovery is sharper and the October decline is negligible.
The past year has seen the aggregate earnings estimate for 2026 shrink 9.9%, while that for 2027 dropped was an almost flat -0.4% from 2025 actuals. The macroeconomic uncertainty, recent rate hike, adverse geopolitics and consumer thrift are contributing to softer spending and thus weaker estimates.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Returns Have Been Moderate
Over the past year, the Zacks Electronic - Commerce Industry has traded relatively close to the broader Retail and Wholesale sector, although the S&P 500 has stayed generally ahead.
The stocks in this industry have collectively gained 12% over the past year, compared to the 21.3% gain for the broader Zacks Retail and Wholesale Sector and the 71.5% gain for the S&P 500.
One-Year Price Performance
Image Source: Zacks Investment Research
Industry Somewhat Undervalued
Over the past year, the industry has mostly traded at a premium to the S&P 500 and a discount to the broader industry. Its current price-to-forward 12 months’ earnings (P/E) of 19.68X is a 26.5% discount to its median value over the past year and an 8.3% discount to the industry’s 21.47X, although it represents a premium of 3.2% to the S&P 500’s 19.07X. The shares have traded in the range of 19.68X to 49.66X over the past year.
Forward 12 Month Price-to-Earnings (P/E) Ratio
Image Source: Zacks Investment Research
2 Stocks to Add to Your Portfolio
There is a significant variety of stocks in this industry in terms of lines of business, business model, location and so forth. This is also the reason that choosing stocks especially in the current environment can be tricky. We have used our proprietary ranking system to pick 2 stocks that appear attractive today.
Commerce.com, Inc. (CMRC - Free Report) : Headquartered in Austin, TX, Commerce.com provides cloud-based e-commerce software through its BigCommerce, Feedonomics and Makeswift brands. Its products support online storefront creation, product data management and syndication, and digital experience development. Customers range from small businesses to large B2C retailers and B2B manufacturers and distributors across industries including apparel, home and garden, food and beverage, health and beauty, automotive, and industrial products.
Commerce.com has several opportunities to accelerate revenue growth. Developing more specialized products and features that meet customer needs could support subscription revenue growth. Cross-selling BigCommerce, Feedonomics and Makeswift capabilities could increase revenue from existing customers, while acquiring new merchants would expand the customer base and create opportunities across produces and services. Increased adoption of BigCommerce Payments could provide an additional transaction-based revenue stream as merchants process more sales through the platform.
The company is advancing these opportunities through investments in its product portfolio. It is expanding BigCommerce's B2B capabilities with features such as automated purchase orders and more sophisticated pricing tools to serve manufacturers and distributors with complex requirements. Feedonomics Surface extends product-feed management to small and mid-sized merchants, while a planned freemium launch of Makeswift within BigCommerce could broaden adoption and create cross-selling opportunities.
A strategic partnership with WP Engine is also expected to help attract high-growth brands. Meanwhile, BigCommerce Payments is gaining traction in the U.S., with merchant adoption and payment volume exceeding management's expectations.
B2B is a particular growth priority because Commerce.com believes its flexible platform offers a competitive advantage in serving businesses with complex catalogs, customer-specific pricing and ordering workflows. Management has reported higher win rates, a faster-growing sales pipeline and stronger gross customer retention in B2B than in B2C. B2B gross merchandise volume grew 17% year over year in Q2 2026, outpacing the platform's overall growth of 14%.
Operating leverage provides another important driver of the investment story. In the second quarter of 2026, non-GAAP operating income rose 69% year over year. The company also swung to a GAAP net income of $1.1 million from a loss of $8.4 million in the prior year, on almost flat revenue. The reduction in operating expenses was broad-based, but a $7.6 million reduction in sales and marketing costs was the primary driver, attributable to lower salaries and share-based compensation following earlier cost-optimization measures.
In September 2026, Commerce.com announced a cost-reduction plan targeting $60–$80 million in annualized savings. Management expects only about $3 million of the benefit to be reflected in 2026, with the full annualized savings expected in 2027. The plan could therefore provide a more substantial boost to operating profitability next year, as the company benefits from a lower cost base alongside its product expansion and customer-growth initiatives.
Commerce has a good track record of beating estimates, having topped in each of the last four quarters at an average rate of 204.6%. Analyst estimates for 2026 have increased a modest 4 cents (13.3%) in the last 60 days while 2027 estimates have soared 53 cents (171%). For 2026, analysts expect -1.3% revenue growth and 30.8% earnings growth. For 202, revenue and earnings growth are expected to be a respective -1.5% and 145.6%.
The shares of this Zacks Rank #1 (Strong Buy) company are down 92.3% over the past year.
Price & Consensus: CMRC
Image Source: Zacks Investment Research
Groupon, Inc. (GRPN - Free Report) : Headquartered in Chicago, IL, Groupon operates a global online marketplace connecting consumers with merchants across North America and 13 international markets, including the United Kingdom, Germany, France and Spain. Its Groupon platform offers deals on local services and experiences, including dining, entertainment, travel, beauty and wellness, home and automotive services, and merchandise. Its customers include value-conscious consumers and businesses across hospitality, retail, leisure, wellness and home services.
Groupon's earnings outlook is supported by cost reductions, AI-driven efficiencies and a potential recovery in its North America local-commerce marketplace. In May 2026, the company announced a restructuring involving reductions of up to 400 employees and contractors, targeting $20 million–$25 million in annualized payroll savings. A fuller year of savings could provide a greater earnings benefit in 2027, although restructuring charges and reinvestment in marketing, AI infrastructure and talent will offset part of the gains.
Project Foundry, Groupon's company-wide AI transformation initiative, aims to improve productivity, streamline operations and strengthen customer acquisition and conversion. Upgrades to personalization, search, checkout and deal discovery have already improved conversion across nearly every surface of the new consumer platform.
International Local revenue has shown strong momentum, with revenue growth of 10% in the first quarter of 2026 and 8% in the second. Excluding Giftcloud, which was sold in 2025, growth was 19% and approximately 9%, respectively, supported by seasonal experiences, tours and attractions, and improved organic traffic.
Groupon maintained its 2026 revenue outlook, implying growth of 3%–5%. Management expects stronger second-half earnings growth as benefits from its AI initiatives and increased marketing spend also begin to contribute.
Despite progress in its transformation, Groupon has struggled to achieve consistent profitability in recent years, and translating its initiatives into sustained growth remains a challenge. Cautious consumer spending has weighed on its North American marketplace, although the company's value-oriented deals could appeal to consumers seeking discounts in a more uncertain spending environment.
North America accounted for approximately 77% of 2025 revenue. Local revenue, the largest segment, grew 4.5% for the year, while Local billings increased 14%. However, momentum weakened in 2026, with Local revenue declining 1% in Q1 and 2% in Q2, while billings growth slowed from 2% to a 1% decline. Weakness in Health, Beauty & Wellness and parts of the merchant base offset growth in experiences such as tours and attractions. These trends highlight the challenge of converting platform improvements into sustained growth.
Analyst estimate revisions support this thesis. Estimates have not been a particularly good indicator of company performance in the last four quarters, with Groupon beating in one, meeting in one and missing by huge margins in the other two. Still, the cautious approach for 2026 and optimism for 2027 are heartening. Analysts have left their 2026 estimates unchanged in the last 60 days, while 2027 estimates were raised just 4 cents (4.3%). This represents 3.9% revenue growth and 93.2% earnings growth in 2026. 2027 revenue is expected to grow 9.1% while EPS moves from a 14-cent loss to a 95-cent profit.
The shares of this Zacks Rank #2 (Buy) company’s shares are down 21.9% over the past year.
View the Zacks #1 Rank List
Image: Bigstock
Buy Commerce.com, Groupon Despite eCommerce Market Pressures
While macroeconomic and geopolitical challenges mount and the rate hike serves as a double whammy for the industry, impacting both providers and consumers, the ecommerce market continues to grow through innovation, technology and insight, as it continues to take away slices of the total retail pie. Commerce Department numbers are proof of this trend: ecommerce sales in the second quarter of 2026 grew 12.2% over the second quarter of 2025 (3.8% sequentially), with total retail sales increasing 6.7% (2.9% sequentially). Ecommerce accounted for around 17.1% of total U.S. retail sales.
A point to note here is that consumers are increasingly blending their online and offline shopping experiences, so this distinction may ultimately become irrelevant. As a corollary, it is those retailers that have the capacity to sell through both channels that will be able to compete tomorrow.
While ecommerce continues to take share from traditional retail, the pace has moderated. Additionally, geopolitics is a major challenge for ecommerce players at the moment -- given the wars, tariffs and tensions between nations today that are disrupting supply chains, increasing costs and reducing efficiencies.
This creates a highly competitive environment where growth comes mainly from price competition and share gains. Offsetting these negatives is the adoption of AI technology, which promises to lower barriers for smaller players while generating efficiencies in customer acquisition, operations and marketing.
Our picks Commerce.com (CMRC - Free Report) and Groupon (GRPN - Free Report) are doing precisely that. Commerce has a number of growth opportunities. Its ecommerce technology solutions place it at the heart of the shift from physical to digital, with its innovation engine, B2B focus, cross-selling possibilities and payments product expected to provide a long growth runway. Cost reduction initiatives slated for 2027 will ensure improved profitability going forward.
Groupon should benefit from its local focus, as the international business remains strong and North America is also turning the corner. The company has also implemented restructuring actions that will improve profitability in the quarters ahead. Both companies are using AI to improve their sales outcomes and generate operational efficiencies.
The convenience of online shopping (particularly through mobile devices) remains the top reason for ecommerce volumes, along with the merging of physical and digital channels. Gen-Z is the biggest driver, which is, increasingly, the more relevant demographic.
Many of these buyers have grown up on the Internet and are accustomed to a high level of digitization. They are also likely to hang out on popular social media platforms, allowing themselves to be influenced by the latest trends there. This is driving an entirely different perspective on the ecommerce space, one that revolves around digital influencers and appears to be expanding with more advanced technology such as AR/VR, social commerce and generative AI.
About the Industry
Internet - Commerce refers to all economic activity (B2B, B2C, C2C, DTC) through websites, mobile apps, online marketplaces and social commerce platforms. It therefore continues to evolve as the technologies driving it advance, whether on the consumer side or the platform provider side, increasingly including a combination of chatbots, AI and social media, as well as payments and checkout systems, digital marketing, logistics and fulfillment, cross-border trade, and customer data/analytics tools.
Differentiation comes from better technology for improved showcasing, range, easier navigation and payment, speedier delivery and returns, brand building, comparison shopping, loyalty, etc. as well as good customer service and more (and free) shipping options, which generally tip the scales in favor of larger players.
Factors Driving the Internet-Commerce Industry
Zacks Industry Rank Indicates Weakness
The Zacks Internet - Commerce Industry is a rather large group within the broader Zacks Retail And Wholesale Sector. It carries a Zacks Industry Rank of #183, which places it in the bottom 26% of 247 Zacks industries.
Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1. So the group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates negative near-term prospects.
Ecommerce being in the bottom 50% of Zacks-ranked industries is the result of its relative performance versus others. What we’re seeing in the aggregate estimate revisions for 2026 is a more or less steady decline until March this year, followed by a gradual recovery through September and a significant decline in October. The 2027 estimate follows the same general trend but the recovery is sharper and the October decline is negligible.
The past year has seen the aggregate earnings estimate for 2026 shrink 9.9%, while that for 2027 dropped was an almost flat -0.4% from 2025 actuals. The macroeconomic uncertainty, recent rate hike, adverse geopolitics and consumer thrift are contributing to softer spending and thus weaker estimates.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Returns Have Been Moderate
Over the past year, the Zacks Electronic - Commerce Industry has traded relatively close to the broader Retail and Wholesale sector, although the S&P 500 has stayed generally ahead.
The stocks in this industry have collectively gained 12% over the past year, compared to the 21.3% gain for the broader Zacks Retail and Wholesale Sector and the 71.5% gain for the S&P 500.
One-Year Price Performance
Image Source: Zacks Investment Research
Industry Somewhat Undervalued
Over the past year, the industry has mostly traded at a premium to the S&P 500 and a discount to the broader industry. Its current price-to-forward 12 months’ earnings (P/E) of 19.68X is a 26.5% discount to its median value over the past year and an 8.3% discount to the industry’s 21.47X, although it represents a premium of 3.2% to the S&P 500’s 19.07X. The shares have traded in the range of 19.68X to 49.66X over the past year.
Forward 12 Month Price-to-Earnings (P/E) Ratio
Image Source: Zacks Investment Research
2 Stocks to Add to Your Portfolio
There is a significant variety of stocks in this industry in terms of lines of business, business model, location and so forth. This is also the reason that choosing stocks especially in the current environment can be tricky. We have used our proprietary ranking system to pick 2 stocks that appear attractive today.
Commerce.com, Inc. (CMRC - Free Report) : Headquartered in Austin, TX, Commerce.com provides cloud-based e-commerce software through its BigCommerce, Feedonomics and Makeswift brands. Its products support online storefront creation, product data management and syndication, and digital experience development. Customers range from small businesses to large B2C retailers and B2B manufacturers and distributors across industries including apparel, home and garden, food and beverage, health and beauty, automotive, and industrial products.
Commerce.com has several opportunities to accelerate revenue growth. Developing more specialized products and features that meet customer needs could support subscription revenue growth. Cross-selling BigCommerce, Feedonomics and Makeswift capabilities could increase revenue from existing customers, while acquiring new merchants would expand the customer base and create opportunities across produces and services. Increased adoption of BigCommerce Payments could provide an additional transaction-based revenue stream as merchants process more sales through the platform.
The company is advancing these opportunities through investments in its product portfolio. It is expanding BigCommerce's B2B capabilities with features such as automated purchase orders and more sophisticated pricing tools to serve manufacturers and distributors with complex requirements. Feedonomics Surface extends product-feed management to small and mid-sized merchants, while a planned freemium launch of Makeswift within BigCommerce could broaden adoption and create cross-selling opportunities.
A strategic partnership with WP Engine is also expected to help attract high-growth brands. Meanwhile, BigCommerce Payments is gaining traction in the U.S., with merchant adoption and payment volume exceeding management's expectations.
B2B is a particular growth priority because Commerce.com believes its flexible platform offers a competitive advantage in serving businesses with complex catalogs, customer-specific pricing and ordering workflows. Management has reported higher win rates, a faster-growing sales pipeline and stronger gross customer retention in B2B than in B2C. B2B gross merchandise volume grew 17% year over year in Q2 2026, outpacing the platform's overall growth of 14%.
Operating leverage provides another important driver of the investment story. In the second quarter of 2026, non-GAAP operating income rose 69% year over year. The company also swung to a GAAP net income of $1.1 million from a loss of $8.4 million in the prior year, on almost flat revenue. The reduction in operating expenses was broad-based, but a $7.6 million reduction in sales and marketing costs was the primary driver, attributable to lower salaries and share-based compensation following earlier cost-optimization measures.
In September 2026, Commerce.com announced a cost-reduction plan targeting $60–$80 million in annualized savings. Management expects only about $3 million of the benefit to be reflected in 2026, with the full annualized savings expected in 2027. The plan could therefore provide a more substantial boost to operating profitability next year, as the company benefits from a lower cost base alongside its product expansion and customer-growth initiatives.
Commerce has a good track record of beating estimates, having topped in each of the last four quarters at an average rate of 204.6%. Analyst estimates for 2026 have increased a modest 4 cents (13.3%) in the last 60 days while 2027 estimates have soared 53 cents (171%). For 2026, analysts expect -1.3% revenue growth and 30.8% earnings growth. For 202, revenue and earnings growth are expected to be a respective -1.5% and 145.6%.
The shares of this Zacks Rank #1 (Strong Buy) company are down 92.3% over the past year.
Price & Consensus: CMRC
Image Source: Zacks Investment Research
Groupon, Inc. (GRPN - Free Report) : Headquartered in Chicago, IL, Groupon operates a global online marketplace connecting consumers with merchants across North America and 13 international markets, including the United Kingdom, Germany, France and Spain. Its Groupon platform offers deals on local services and experiences, including dining, entertainment, travel, beauty and wellness, home and automotive services, and merchandise. Its customers include value-conscious consumers and businesses across hospitality, retail, leisure, wellness and home services.
Groupon's earnings outlook is supported by cost reductions, AI-driven efficiencies and a potential recovery in its North America local-commerce marketplace. In May 2026, the company announced a restructuring involving reductions of up to 400 employees and contractors, targeting $20 million–$25 million in annualized payroll savings. A fuller year of savings could provide a greater earnings benefit in 2027, although restructuring charges and reinvestment in marketing, AI infrastructure and talent will offset part of the gains.
Project Foundry, Groupon's company-wide AI transformation initiative, aims to improve productivity, streamline operations and strengthen customer acquisition and conversion. Upgrades to personalization, search, checkout and deal discovery have already improved conversion across nearly every surface of the new consumer platform.
International Local revenue has shown strong momentum, with revenue growth of 10% in the first quarter of 2026 and 8% in the second. Excluding Giftcloud, which was sold in 2025, growth was 19% and approximately 9%, respectively, supported by seasonal experiences, tours and attractions, and improved organic traffic.
Groupon maintained its 2026 revenue outlook, implying growth of 3%–5%. Management expects stronger second-half earnings growth as benefits from its AI initiatives and increased marketing spend also begin to contribute.
Despite progress in its transformation, Groupon has struggled to achieve consistent profitability in recent years, and translating its initiatives into sustained growth remains a challenge. Cautious consumer spending has weighed on its North American marketplace, although the company's value-oriented deals could appeal to consumers seeking discounts in a more uncertain spending environment.
North America accounted for approximately 77% of 2025 revenue. Local revenue, the largest segment, grew 4.5% for the year, while Local billings increased 14%. However, momentum weakened in 2026, with Local revenue declining 1% in Q1 and 2% in Q2, while billings growth slowed from 2% to a 1% decline. Weakness in Health, Beauty & Wellness and parts of the merchant base offset growth in experiences such as tours and attractions. These trends highlight the challenge of converting platform improvements into sustained growth.
Analyst estimate revisions support this thesis. Estimates have not been a particularly good indicator of company performance in the last four quarters, with Groupon beating in one, meeting in one and missing by huge margins in the other two. Still, the cautious approach for 2026 and optimism for 2027 are heartening. Analysts have left their 2026 estimates unchanged in the last 60 days, while 2027 estimates were raised just 4 cents (4.3%). This represents 3.9% revenue growth and 93.2% earnings growth in 2026. 2027 revenue is expected to grow 9.1% while EPS moves from a 14-cent loss to a 95-cent profit.
The shares of this Zacks Rank #2 (Buy) company’s shares are down 21.9% over the past year.
Price & Consensus: GRPN
Image Source: Zacks Investment Research