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Shares of Groupon (NASDAQ:GRPN) opened sharply higher on Monday after Piper Jaffray upgraded the online discounter of goods and experiences. Analyst Samuel Kemp is boosting his rating from neutral to overweight and, perhaps more importantly, he's also bumping its price target from $4 to $6.  

Groupon has spent the past year going through an extreme makeover. It has been shaking up its executive ranks, unloading unprofitable international operations, and sizing up acquisitions. The radical moves are all about focusing on its home turf, and that's where Kemp sees strong potential for appreciation.

Kemp is encouraged by Groupon eyeing a big jump in marketing spend this year. The former dot-com darling recently rolled out its first national ad campaign since 2011. Groupon is spending a lot of money on repositioning itself as a hub of deal discovery, and that's where Kemp feels that the market isn't giving it enough credit for the millions of new customers who will land on its virtual doorstep.

Well-timed optimism 

Piper Jaffray isn't the only one that's bullish on Groupon. Maxim Group analyst Tom Forte initiated coverage of the stock with a buy rating last month, slapping a price target of $5 on the shares.

The timing of the positive moves -- particularly Piper Jaffray's upgrade this week -- is interesting. Groupon reports quarterly results next week. The stock got clobbered last time out, plunging 18% after offering up uninspiring outlook. This isn't the kind of momentum that one typically likes to see heading into a fresh financial report. 

However, the opportunity here lies in what happens beyond next Tuesday afternoon. Next week could be wild. The combination of Groupon's low price and the many moving parts that keep Wall Street pros guessing wrong have made the past few earnings reports adventures in volatility. 

However, Kemp sees a return to double-digit domestic growth in gross billings once Groupon's focus and marketing budget begin to pay off. Groupon's cash-rich and debt-free balance sheet afford it the opportunity to ramp up its advertising as it waits out a return to profitability. It's a luxury that many online marketers don't have. 

This may seem like an odd time for Maxim and Piper Jaffray to warm up to what in retrospect may seem like a dot-com bust. Groupon is trading for a fifth of its late 2011 IPO price of $20. However, if you feel that companies with nearly $700 million on their balance sheets can buy second chances, then Groupon may be a good bounce-back candidate even if next week's report is initially unsettling to the market.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.