Why Groupon (GRPN) Dipped More Than Broader Market Today
Groupon (GRPN) closed the latest trading day at $11.80, indicating a -1.09% change from the previous session's end. This move lagged the S&P 500's daily loss of 0.47%. Elsewhere, the Dow gained 0.37%, while the tech-heavy Nasdaq lost 1.35%.
Heading into today, shares of the online daily deal service had gained 13.62% over the past month, outpacing the Retail-Wholesale sector's loss of 0.47% and the S&P 500's loss of 1.78% in that time.
The investment community will be paying close attention to the earnings performance of Groupon in its upcoming release. On that day, Groupon is projected to report earnings of -$0.06 per share, which would represent a year-over-year decline of 120%. In the meantime, our current consensus estimate forecasts the revenue to be $128.92 million, indicating a 6.39% decline compared to the corresponding quarter of the prior year.
Investors should also note any recent changes to analyst estimates for Groupon. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Groupon is holding a Zacks Rank of #3 (Hold) right now.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 63, finds itself in the top 26% echelons of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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This article originally published on Zacks Investment Research (zacks.com).
