Shares of Groupon (NASDAQ: GRPN) were down 9.2% during the extended trading session on February 28, after the U.S.-based global E-commerce marketplace, which connects subscribers with local merchants, reported lackluster Q4 results falling short of analysts’ expectations.
Adjusted earnings of $0.18 per share dipped 64.7% year-over-year and fell a cent short of analysts’ expectations of $0.19 per share. The company reported earnings of $0.51 per share for the prior-year period.
Revenues declined 35% year-over-year to $223 million and fell modestly shy of consensus estimates of $223.53 million.
The decrease in revenues reflects lower demand as well as the transition of Goods from a first-party to a third-party marketplace model, partially offset by higher Local gross billings.
Looking ahead, the company provided guidance for FY2022.
For the full year, Groupon expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of at least $112 million. It also forecasts a recovery in Local billings to accelerate throughout the year in both North America and International regions.
The company forecast adjusted EBITDA to be breakeven during the first quarter, while revenues are forecast to be in the range of $160 million to $170 million.
Looking ahead, Groupon CEO, Kedar Deshpande, commented, “In 2022, we will be moving with a sense of urgency to build an even deeper understanding of our marketplace dynamics and the most important elements of our customer and merchant partner value propositions.”
He further added, “We believe this understanding will allow us to build a better offering for our customers and merchant partners and deliver results that will unlock the power of our marketplace flywheel.”
Overall, the stock has a Hold consensus rating based on one Buy, one Hold, and one Sell. The average Groupon price target of $28.67 implies 32% upside potential from current levels.
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