Analyst Cuts Groupon (GRPN) Price Target to $8 as Concerns Weigh; Maintains Sell
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Price: $19.59 -0.05%
Rating Summary:
14 Buy, 16 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
14 Buy, 16 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Ascendiant Capital's Edward Woo lowered estimates and his price target Groupon (Nasdaq: GRPN) Thursday morning. The analyst cited "increased costs and competition."
Woo now sees Groupon shares falling to $8 over the next year, down from a previous target of $11. He maintains a Sell rating even amid recent declines in the stock.
Concerns related to soft forex were noted, and the analyst said Groupon's change in expiration policy "...will likely result in increased revenue reserves due to increased risk from customer refunds." Woo warned the company's "recent restatement and weakness in controls are likely to bolster continued skepticism as to Groupon's valuation, growth prospects, and profit potential. In addition, weakness for valuations of social media stocks (triggered by the controversial recent IPO of Facebook) may add to this volatility."
The Ascendiant analyst reduced his FY12 EPS estimate from 22 cents to 19 cents but maintained a sales estimate of $2.38 billion.
With Groupon shares down 2.8 percent to $9.34 at last check, Woo's new price target represents potential downside of about 14 percent.
For an analyst ratings summary and ratings history on Groupon, Inc. click here. For more ratings news on Groupon, Inc. click here.
Woo now sees Groupon shares falling to $8 over the next year, down from a previous target of $11. He maintains a Sell rating even amid recent declines in the stock.
Concerns related to soft forex were noted, and the analyst said Groupon's change in expiration policy "...will likely result in increased revenue reserves due to increased risk from customer refunds." Woo warned the company's "recent restatement and weakness in controls are likely to bolster continued skepticism as to Groupon's valuation, growth prospects, and profit potential. In addition, weakness for valuations of social media stocks (triggered by the controversial recent IPO of Facebook) may add to this volatility."
The Ascendiant analyst reduced his FY12 EPS estimate from 22 cents to 19 cents but maintained a sales estimate of $2.38 billion.
With Groupon shares down 2.8 percent to $9.34 at last check, Woo's new price target represents potential downside of about 14 percent.
For an analyst ratings summary and ratings history on Groupon, Inc. click here. For more ratings news on Groupon, Inc. click here.
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