Piper Jaffray Remains Overweight on Groupon (GRPN) After Traveling with Management
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Piper Jaffray reiterated an Overweight rating and $6.50 price target on Groupon, Inc. (NASDAQ: GRPN) after traveling with management. A key takeaway from the travels with management is the significance of the internal focus change for Groupon. Investors are concerned with Groupon's ability to sustainably attract customers without raising costs.
Analyst Samuel Kemp commented, "We recently traveled with Groupon’s management team and came away increasingly bullish on the company’s efforts in narrowing its focus on geographies/products/services in which it can succeed, which we believe will drive 2018 EBITDA 10%+ above the Street. The company's core marketing tactics are acquiring solid customers at a stable cost per acquisition, while restructuring efforts have reduced profitability and focus headwinds. Signs of an improving customer experience are beginning to show. While shares of GRPN are up nearly 50% since reporting Q2, we would continue to own GRPN as customer acquisition and cost controls should drive EBITDA estimates higher. We are remaining OW on shares of GRPN, with a $6.50 price target (12x 2018E EV/EBITDA)."
Shares of Groupon, Inc. closed at $5.59 yesterday.
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