Groupon (GRPN) Not Yet... Jefferies

Jefferies analyst, Brian Pitz, sees a long road ahead for Groupon (NASDAQ: GRPN) with continuing margin pressure from investments but improving fundamentals. No change to Hold rating but PT increases to $3.50 (from $3.00).

GRPN delivered better than expected results on improving operating fundamentals but its transition to a more reliable footing remains a work in progress. The Co kept streamlining its int'l businesses and now operates in only 27 countries while investments remain focused on North America (emphasis on adding new customers) and core markets.

Total revenue declined 2% Y/Y (-1% ex-FX) to $732MM vs. Street expectations of $718MM. Adjusted EBITDA of $31MM came in above consensus at $23MM. Non-GAAP net loss per share of $0.01 was ahead of Street's loss of $0.02. North America (NA) revenue grew 4% Y/Y to $501MM, slightly below Street's $504MM. Int'l revenue declined 15% Y/Y to $231MM, ahead of Street's $221MM. Gross billings declined 5% Y/Y to $1.47B (-3% exFX), coming in below Street expectations of $1.48B. Gross billings were up 5% in NA, down 15% (-12% ex-FX) in EMEA and down 28% (-17% ex-FX) in ROW.

For FY16 mgmt reiterated prior guidance range for Revenue of $2.75B - $3.05B and raised slightly Adj. EBITDA guidance to $85MM - $135MM vs. cons at $3.01B / $111MM, respectively. Adj. EBITDA range shifted up by $5MM.

For an analyst ratings summary and ratings history on Groupon, Inc. click here. For more ratings news on Groupon, Inc. click here.

Shares of Groupon, Inc. closed at $3.62 yesterday.

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