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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Groupon (NASDAQ: GRPN ) were looking like a deal, rising as much as 16% on strong sales in its quarterly report.
So what: The daily deals merchant said its mobile app helped drive sales in the quarter, as it saw revenue growth of 7.5%, to $601.4 million, ahead of analyst estimates at $591 million. The online discounter posted a per-share loss of $0.01, a penny better than the experts predicted. North American sales fueled growth in the quarter, as revenue in the region was up 42%, to $339.6 million. However, international sales fell 18%, the fourth straight sequential drop in overseas revenue, indicating that Groupon may have been just a fad outside its core market.
Now what: As for mobile, the percentage of coupons sold through handheld devices in North America improved from 30%, to 45%, and the category appears to be the future of the company. With revenue slowing to single digits, and profits nowhere to be found, however, the former juggernaut still seems overvalued. The company may have beaten estimates last night, but after a year-and-a-half in public markets, the stock is still floundering, and the business model remains unproven. It's hard to see stable profits emerging anytime soon.
For more on the deals leader, I recommend getting a copy of our premium research report all about Groupon. It covers the company's opportunities and risks, and comes with a year's worth of free updates. To get started with this top-notch package now, all you have to do is click right here.