Collins Stewart Starts Groupon, Inc. (GRPN) at Neutral; Leader in Daily Deals - Competition, Margins OK But Growth Slowing
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Price: $21.51 -2.14%
Rating Summary:
14 Buy, 16 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
14 Buy, 16 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Collins Stewart initiates coverage on Groupon, Inc. (NASDAQ: GRPN) with a Neutral. PT $19.00.
Collins analyst says, "Groupon has 55% marketshare of daily deals in North America, and its revenue has grown at a phenomenal rate - 360-fold in 9 quarters. Compared to traditional advertising, Groupon's discounted deals method offers local merchants a better way of customer acquisition - no upfront ad spend, guaranteed customers and targeting."
"Believe key issue going forward will be revenue growth: 1) Core daily deals business showing early signs of maturity, with net new subscriber adds peaking in 1Q11 for North America; 2) Slowdown in Q/Q revenue growth to 10% in 3Q (vs. 33%/72% for 2Q/1Q); 3) Pressure on take rates from faster growing new categories; and 4) We believe the addressable market is smaller than some investors think - it is local advertising ($255B, not trillions), and Groupon offering is effective only for low variable cost categories and if used infrequently. Our 2013 revenue/EPS estimates are 11%-19% lower than consensus."
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 $19.27 yesterday.
Collins analyst says, "Groupon has 55% marketshare of daily deals in North America, and its revenue has grown at a phenomenal rate - 360-fold in 9 quarters. Compared to traditional advertising, Groupon's discounted deals method offers local merchants a better way of customer acquisition - no upfront ad spend, guaranteed customers and targeting."
"Believe key issue going forward will be revenue growth: 1) Core daily deals business showing early signs of maturity, with net new subscriber adds peaking in 1Q11 for North America; 2) Slowdown in Q/Q revenue growth to 10% in 3Q (vs. 33%/72% for 2Q/1Q); 3) Pressure on take rates from faster growing new categories; and 4) We believe the addressable market is smaller than some investors think - it is local advertising ($255B, not trillions), and Groupon offering is effective only for low variable cost categories and if used infrequently. Our 2013 revenue/EPS estimates are 11%-19% lower than consensus."
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 $19.27 yesterday.
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