Groupon (GRPN) Adds to Gains on Positive Analyst Sentiment

Groupon (NASDAQ: GRPN) is seeing a sharp upside move on volume as investors continue to react to yesterday's positive analyst commentary at Piper Jaffray.

Piper Jaffray analyst Gene Munster reiterated an Overweight rating and $16 price target Groupon Monday saying tracking marketplace deals suggest the slow turnaround continues. They remain buyers of the stock.

Munster said, "We remain buyers of GRPN. Our proprietary deal tracking has showed the number of deals available on Groupon steadily increasing since Oct-13, when we began this analyses. We view our findings as confirmation of the longer term trend of Groupon increasing its deal density, which moves the company closer to its goal of building the leading local deal marketplace. This is different than Groupon's historical push-email business, moving toward a pull model driven by consumer demand."

He added, "Separately, in the Mar-14 quarter, Groupon reported 200k deals on the network, up from 140k in the Dec-13 quarter. We expect that number will increase to 500k deals globally in 3-4 years, suggesting about 30% a year growth in the number of deals. Groupon does not disclose the percentage of business from the pull marketplace, but reported 9% of total traffic in North America came from search (pull marketplace)."

After gaining 2% on Monday, shares of Groupon are up another 7.8% today to $7.00

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