Can Groupon Convince Wall Street It's Half Off?
Is Groupon’ s stock as good a deal as the coupons it offers on its site?
That depends on how the company address investor concerns about slowing growth, the long-term potential of the deal-a-day business, and new revenue streams from the likes of Groupon Goods.
CEO Andrew Mason surprised Wall Street and beat expectations when the company reported its first quarter results — we’ll see if he has another upside surprise.
Groupon shares are moving higher — and rebounded from all-time lows last week — as some shorts cover their position ahead of the earnings report. But the stock is still down some 60 percent since its November initial public offering.
Wall Street expects the company to report earnings of 3 cents per share on $573 million in revenue, up slightly from the prior quarter. But perhaps even more important is the company’s outlook for the rest of the year — analysts are looking for 47 percent revenue growth for the full year.
But with Groupon it’s not just about the top and bottom line. As a sign of long-term health of the deal-a-day business, investors will also be looking for metrics and commentary about new and returning customers and merchants. As the company looks to diversify, we’ll be looking for commentary about mobile users and how fast mobile revenue is growing. And then there’s Groupon Goods — deals on products, rather than services, like most of the company’s coupons. It’s off to a strong start, but has raised accounting questions.
Questions about Groupon’s accounting and transparency contributed to the stock’s fall since its IPO.
Other concerns include growing competition from the likes of Living Social, which is backed by Amazon and few barriers to entry. (Related: LivingSocial CEO - Why We're No Groupon.)
And now The Wall Street Journal says the company faces a new challenge, reporting that employees, facing growing pressure and tighter compensation, want to jump ship.
-By CNBC's Julia Boorstin
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