Barrington Research Starts Groupon (GRPN) at Outperform Due to Its First Mover Advantage
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Price: $7.13 -1.79%
Rating Summary:
4 Buy, 18 Hold, 7 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 21 | Down: 24 | New: 29
Rating Summary:
4 Buy, 18 Hold, 7 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 21 | Down: 24 | New: 29
Trade GRPN Now!
Barrington Research initiated coverage on shares of Groupon Inc. (Nasdaq: GRPN) today with an Outperform rating and $30 price target. Shares of GRPN are trading down 2.7 percent on the day.
The firm highlights Groupon has first mover advantage, global leadership, and brand recognition as it created a new business category. The company generates 65 percent of its revenues internationally and is five times larger than its biggest competitor.
Barrington believes Groupon will be able to sustain its market share even as Google (Nasdaq: GOOG), Amazon (Nasdaq: AMZN), and Living Social all improve their presence in the new business market.
Management is now focusing on using its capital to retain customers instead of looking for new customers. In the third quarter of 2011, the company added 6.4 million customers, a 187 percent increase year over year. Groupon is also launching new products for both merchants and customers to help better their Groupon experience.
An analyst at Barrington comments, "Based in part on our proprietary surveys, we believe Groupon will be an enduring local commerce platform, maintain global leadership, and obtain profitability. Although valuation seems fair and there are near-term risks, there is significant upside to the Street consensus, in our view."
For FY12, the firm estimates earnings of $0.25 per share on $2.312 billion in sales. For FY13, Barrington forecasts $0.77 per share in earnings on $2.85 billion in sales.
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The firm highlights Groupon has first mover advantage, global leadership, and brand recognition as it created a new business category. The company generates 65 percent of its revenues internationally and is five times larger than its biggest competitor.
Barrington believes Groupon will be able to sustain its market share even as Google (Nasdaq: GOOG), Amazon (Nasdaq: AMZN), and Living Social all improve their presence in the new business market.
Management is now focusing on using its capital to retain customers instead of looking for new customers. In the third quarter of 2011, the company added 6.4 million customers, a 187 percent increase year over year. Groupon is also launching new products for both merchants and customers to help better their Groupon experience.
An analyst at Barrington comments, "Based in part on our proprietary surveys, we believe Groupon will be an enduring local commerce platform, maintain global leadership, and obtain profitability. Although valuation seems fair and there are near-term risks, there is significant upside to the Street consensus, in our view."
For FY12, the firm estimates earnings of $0.25 per share on $2.312 billion in sales. For FY13, Barrington forecasts $0.77 per share in earnings on $2.85 billion in sales.
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