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 "daily deal" specialist Groupon
So what: Groupon's fourth-quarter revenue nearly tripled, but lighter-than-expected billings of $1.25 billion -- up just 8% from the previous quarter -- suggests that its whopping growth may be slowing. Additionally, a big one-time tax bill and management's failure to disclose several key metrics (groupons sold, subscribers, repeat rates) are also fueling skepticism about Groupon's long-term potential.
Now what: Management now sees first-quarter revenue of $510 million-$550 million, versus the average analyst estimate of $501 million. "We will continue to invest in new services and tools that help our merchant partners be more successful and drive local commerce around the world," co-founder and CEO Andrew Mason said. Unfortunately, when you couple Groupon's still-lofty valuation with clear signs of a slowdown in the "daily deals" space, it's tough to put money on it.
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