Earnings season is now starting to wind down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Groupon (GRPN 8.44%) is one of them. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise.
Groupon hit the ground running in the social-deals space, becoming the best-known daily discount offering website in the budding industry. But with daily deals starting to mature, what's the next driver for Groupon's growth? Let's take an early look at what's been happening with Groupon over the past quarter and what we're likely to see in its quarterly report on Wednesday.
Stats on Groupon
|
Analyst EPS Estimate |
$0.03 |
|
Year-Ago EPS |
($0.02) |
|
Revenue Estimate |
$639.6 million |
|
Change From Year-Ago Revenue |
26% |
|
Earnings Beats in Past 4 Quarters |
2 |
Source: Yahoo! Finance.
Will Groupon give shareholders a great deal?
Analysts have gotten a bit more optimistic about Groupon in the past month, raising their full-year 2013 outlook for the company by $0.02 per share. The stock has bounced even more convincingly off its recent lows, rising more than 45% since late November.
Since its late-2011 IPO, Groupon has seen its stock plunge as competition in the social deals space got fierce. Amazon's (AMZN +0.34%) AmazonLocal service and the LivingSocial site that it has a substantial stake in both offer online coupons, and with deep pockets and multiple lines of business, Amazon can afford to give its deals sites time to become popular without worrying about their having a huge impact on the company's results. More recently, Facebook (FB +1.81%) has started looking into coupons as a way to try to generate much-needed revenue, leveraging its much greater penetration rate to try to get shoppers to buy into a new social-deal paradigm.
As a result, Groupon is looking to expand in new directions. In January, it added its Groupon Payments option to its merchant smartphone service, allowing merchants to accept credit cards by smartphone. The mobile-payments industry also has plenty of competition, but the service at least gives merchants a reason to go with Groupon even if they decide to opt out of doing social deals.
The bigger bet Groupon has made is with its Goods service, which involves selling merchandise in much the same vein as Amazon. With its recent purchase of CommerceInterface, Groupon will displace Amazon and eBay from the online-sales technology provider's client list and hopes to use the technology to boost its already fast-growing revenue stream from Groupon Goods.
In its quarterly report, watch for Groupon to continue outlining its strategy to broaden its business. With analysts having upgraded the stock in anticipation of success from its recent strategic moves, Groupon needs to prove it can draw traffic away from competitors to its local marketplace. Otherwise, investors will end up disappointed even with shares at a discounted price.
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