September 18, 2012
Groupon (Nasdaq: GRPN ) stock fell 9.9% Monday to close at less than $5 per share, as analysts expressed doubts about the continued success of the e-discounter.
Groupon, the premier daily deals website, makes money by selling coupons online and then splitting the revenues from the sales with the merchants.
But marketing expenses are rising, and an analyst named Ken Sena with Evercore Partners has identified the current situation as being a case of rising “daily-deal fatigue,” putting a $3 target value on shares and putting a “sell” rating on the stock. Groupon shares have already lost three quarters of their value this year.
Last month’s earnings disappointment didn’t help the online discount site—the struggling European economy was identified as the primary reason for the miss.
More Expert Advice from The Motley Fool
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013
." I invite you to take a copy, free for a limited time. Just click here
to access the report and find out the name of this under-the-radar company.