Groupon Soars On Post-Earnings Euphoria

Groupon (NASDAQ:GRPN) closed the regular session up 3.71 percent and soared as much as 11.63 percent higher in post-market trading. The beleaguered daily-deals site posted first-quarter earnings that beat expectations. Revenue climbed 7.53 percent on the year to $601.4 million, which compares to the average estimate of $588.92 million. Adjusted earnings increased 50 percent on the year to $0.03 per share, meeting the average estimate.

Groupon stock has performed pretty poorly since the company held its IPO in 2011. Shares are down nearly 80 percent since then, with 47 percent year-over-year losses overshadowing mild year-to-date gains of 8.6 percent. Shares were up as much as 35 percent this year as recently as April, but took what seems to be a now-unwarranted dive ahead of earnings.

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The stock has been subjected to the vagaries of Mr. Market’s mood swings because of its still largely unproven business model. Investors are unsure whether or not the company has legitimate long-term prospects. The real mover for the stock — and the company — will be its ability to grow into a robust, international e-commerce platform, buoyed by a strong presence in mobile and location-based services. A successful transformation could turn one of the biggest Internet IPO flops into one of the biggest Internet turnaround stories.

Groupon, Inc. Stock Chart - GRPN Interactive Chart - Yahoo! Finance

Over the long run, Groupon has proven that it can generate revenue, but has not necessarily been able to pull its earnings up from below the red line.

2008

2009

2010

2011

2012

Revenue ($) in   millions

0.005

14.54

312.94

1.61B

2.33B

Diluted EPS ($)

-0.01

-0.02

-1.33

-1.03

-0.10

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At one point — between the beginning of March and the end of April — Groupon stock was up more than 26 percent. Investors seemed to gain a renewed enthusiasm for the company after founder Andrew Mason was relieved of his position as CEO.

In case you missed it, here are the slides from the company’s earnings presentation.

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