Wells Fargo Upgrades Groupon, Inc. (GRPN) to Outperform

December 11, 2013 7:33 AM EST
Get Alerts GRPN Hot Sheet
Price: $37.24 -1.48%

Rating Summary:
    12 Buy, 18 Hold, 4 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 25 | Down: 37 | New: 115
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Wells Fargo upgraded Groupon, Inc. (NASDAQ: GRPN) from Market Perform to Outperform and raised its valuation range to $13.00 to $14.00 from $5.00 to $6.00.

"We believe Groupon is positioned well to take continued share in the massive local commerce market," analyst Trisha Dill states. "We are bullish on the company’s strategy to transform into a “pull” marketplace, away from its daily deals legacy, and early indications suggest this transition is gaining traction."

She adds, "We also view mobile commerce as an incremental opportunity for Groupon given mobile users buy 50% more than non-mobile users, app downloads are accelerating (9MM in the most recent quarter, up from 7.5MM in Q2), and Groupon’s mobile offering is improving (e.g., better push notifications, showcasing search in its new app, and presenting local deals based on a user's current location). We also view Groupon Goods as an underappreciated asset, and we believe as that business scales and efficiencies are realized in the company's international segments, that adjusted EBITDA margin can more than double over time."

The firm is introducing new non-GAAP EPS and EBITDA estimates of $0.08/$289.4MM in FY13E and $0.25/$399.2MM in FY14.

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 $10.04 yesterday.

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