The Hockey team of United State happened to lose semi finals from Canada in 1-0 goals but the downfall of Groupon’s shares is more disastrous than the sports team. The fall of 22 % forced the company to shut at $8.03 per share. Though, FactSet forecasted 5 cents profits per share in its predictions yet Groupon’s claims that it has expectations of losing 2 to 4 cents per share. This was supposed to be biggest closure of this company since June 2013.
Actually the predictions were based upon the profits assumptions of fourth closure. The Groupon’s fourth closure declared 4 cents growth on the basis of per share and its total revenue was about $768.4 million. It goes without saying that Groupon Chief Executive Eric Lefkofsky and Chief Financial Officer Jason Child had already showed their ambiguous feelings over the raising billing and manufacturing costs.
Besides, the notable figure of RBC Mark Mahaney said that billing growth has been plummeted from 10% gain and Groupon had reported this in September. Furthermore, he categorically said that the International and local billing costs are decreasing and trends on per customer basis have also been changed. He figured out Groupon’s per share forecast from 7$ to 11$.
Mark Mahaney has also analyzed the Groupon’s report and holds the opinion that the higher ambitions of the company and urge for becoming a giant market player have made the company to compete against the old and already established market players- Amazon, EBay, Priceline.com Inc etc.
He says as per our analysis the motto of company and efforts to make it giant will surely work for it and it has the potential to win the local commerce and services market.
Apart from this, Stephen Ju of Credit Suisse had also given his rating to the company. He claims that it would $10 per share target price in the stock for the company. He asks to wait for some time to let the business stabilize before determining something about the company.
Source: http://www.marketwatch.com/story/groupon-gets-taken-to-task-over-outlook-strategy-2014-02-21