Here's Why Groupon's Stock Plummeted 19% Last Month

Investors didn't like that Groupon's earnings fell short of Wall Street's expectations.

Chris Neiger
Chris Neiger
Mar 12, 2018 at 5:31PM
Technology and Telecom

What happened

Shares of Groupon, Inc (NASDAQ:GRPN) fell by 19.1% in February, according to data provided by S&P Global Market Intelligence, after the company's fourth-quarter 2017 earnings fell short of analysts' consensus earnings estimate.

So what

Groupon's sales fell by about 4% year over year in the fourth quarter, but the revenue slide was expected, and total sales of $873.2 million in the quarter actually beat the $852.8 million analysts were expecting.

Chart of stock numbers showing gains and losses.

Image source: Getty Images.

Net income from continuing operations was $51.1 million in the quarter, up from a net loss of $39.5 million in the fourth quarter of 2016. But investors weren't happy that Groupon's non-GAAP earnings per share of $0.07 fell short of the $0.09 consensus estimate Wall Street had in mind. The earnings miss sparked a sell-off that began in the middle of February and continued through most of the remainder of the month. 

Now what

Investors started to change their opinion of Groupon in March and have pushed the company's share price up about 9% since the beginning of the month. That optimism appears to be fueled by Morgan Stanley analyst Jonathan Lanterman upgrading Groupon's stock from equal weight to underweight. Shares of Groupon have been volatile lately, but the company's 17% gain over the past 12 months match the S&P500's.