Wells Fargo Comments on Groupon (GRPN) Results and Guidance

February 21, 2014 10:18 AM EST
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Price: $3.51 -0.85%

Rating Summary:
    11 Buy, 20 Hold, 6 Sell

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    Up: 13 | Down: 22 | New: 54
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Wells Fargo maintained an Outperform rating on Groupon, Inc. (NASDAQ: GRPN) and reduced its price target to $11-$12 (from $13-$14). Analyst Trisha Dill described the quarter as "ok" though it was overshadowed by disappointing EBITDA guidance.

"Groupon reported Q4 results that were better than feared in our view (adjusted EBITDA was within $3MM of our estimate), but larger-than-expected investments in the business are expected to significantly impact profitability this year, as the company continues to dramatically transform the business. The flip side of this disappointing guidance is that we believe management’s intent to step on the gas and spend more marketing dollars signals confidence in the stability of the business fundamentals and the quality of the deal marketplace it has built (the first step was setting the business up for a shift to a marketplace, and the next phase is getting the word out). We continue to believe Groupon is making the right long-term changes in the business model, but as we've previously noted, the transition could be choppy over the next several quarters," said Dill.

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 $10.28 yesterday.

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