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GRPN Earnings: Groupon Surges After Finally Returning a Growth in Revenue
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GRPN Earnings: Groupon Surges After Finally Returning a Growth in Revenue

Story Highlights

Groupon surged in pre-market trading after an increase in quarterly revenue for the first time over the past eight years.

Shares of Groupon (NASDAQ:GRPN) surged in pre-market trading after the company announced an increase in quarterly revenue for the first time over the past eight years. The global e-commerce marketplace generated revenues of $123.1 million, up by 1% year-over-year but exceeded consensus estimates of $116.7 million.

The company’s CEO, Dusan Senkypl, commented that while the company’s “business is back on its feet and momentum is in the right direction,” it is “not yet firing on all cylinders.”

The company reported adjusted earnings of $0.06 per share in the first quarter, compared to a loss of $0.65 per share in the same period last year. Analysts were expecting the company to break even in the first quarter.

GRPN’s Q1 Revenue Growth Drivers

Groupon’s revenue growth was largely driven by its North American business, which saw Q1 revenues of $94.1 million, up by 6% year-over-year, driven by its travel category amid lower demand for goods and local categories. Groupon’s goods business category is a product deal site where branded goods are sold at discounted prices.

Groupon’s Key User Metrics

The company had 10.2 million active customers in North America at the end of the first quarter, a 6% decline compared to the previous year, while its international customer base also dropped by 19% to 5.9 million.

What Is the Future of Groupon Stock?

Analysts remain sidelined about GRPN stock, with a Hold consensus rating based on one Buy and Sell each. Over the past year, GRPN has surged by more than 100%, and the average GRPN price target of $20 implies an upside potential of 90.5% from current levels.

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