Groupon (GRPN) Exceeds Market Returns: Some Facts to Consider

Zacks
2024-11-02

Groupon (GRPN) closed the latest trading day at $10.34, indicating a +0.73% change from the previous session's end. The stock outperformed the S&P 500, which registered a daily gain of 0.41%. Elsewhere, the Dow saw an upswing of 0.69%, while the tech-heavy Nasdaq appreciated by 0.8%.

The online daily deal service's stock has climbed by 12.87% in the past month, exceeding the Retail-Wholesale sector's loss of 1.22% and the S&P 500's loss of 0.97%.

The upcoming earnings release of Groupon will be of great interest to investors. In that report, analysts expect Groupon to post earnings of $0.06 per share. This would mark year-over-year growth of 150%. Meanwhile, our latest consensus estimate is calling for revenue of $119.02 million, down 5.89% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates are projecting earnings of $0.47 per share and revenue of $511.06 million, which would represent changes of +190.38% and -0.75%, respectively, from the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Groupon. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Groupon is currently sporting a Zacks Rank of #2 (Buy).

In the context of valuation, Groupon is at present trading with a Forward P/E ratio of 21.83. For comparison, its industry has an average Forward P/E of 23.66, which means Groupon is trading at a discount to the group.

The Internet - Commerce industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 74, this industry ranks in the top 30% of all industries, numbering over 250.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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