About to Buy Groupon, Inc. (GRPN)? Look at These Metrics First

Analysts at B. Riley FBR lifted target price for shares of Groupon, Inc. (NASDAQ:GRPN) but repeated their Buy recommendation for the stock in their opinion released on November 08. The price target has been raised from $6.30 to $5.60. Analysts at Morgan Stanley issued an upgrade from Underweight to Equal-Weight for the stock, in a research note that dated back to March 05.

In the period that ended December 31, 2018, short interest in Groupon, Inc. (NASDAQ:GRPN) stock is on the rise. The 7.72% advance could be an indication that investors and traders expect a deterioration in the stock price, often as a result of a deterioration in the business’ fundamentals. The average analyst recommendations at 2.8 suggests buying these shares. Between December 14 and December 31, the total number of shorted shares amounted to 38.48 million shares. That was 2,758,282 more shares than the total of 35.72 million shares in the space of prior two weeks, which means more traders or funds betting that the stock will go down. Average daily volume for GRPN at the December 31st settlement plunged to 7,968,229, as compared to 9,048,414 at the December 14th report. That brought days to cover to 4.828684, a 22.33% increase from the 3.947407 days to cover recorded at the prior short interest data release.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Groupon, Inc. (NASDAQ:GRPN)’s prospects. The earliest insider trade took place on 12/07/2018. Lefkofsky Eric P parted with a total of 3 million shares of company at average share price of $3.07. The total for the sales was set at $9.21 million. After this transaction, the Director, 10% Owner account balance stood at 82.96 million shares. The stock grew 16.94 percent since that insider sale. On 09/13/2018, Lefkofsky Eric P, Director, 10% Owner, sold 1.5 million shares at a price per share of $3.82. This removed 5.73 million shares from the insider’s fortune and the stock saw a -6.02 percent retreat in value since the news became public. This transaction left 85.96 million shares in the Director, 10% Owner account. On 06/07/2018, Director, 10% Owner Lefkofsky Eric P performed a sale transaction worth $6.9 million. This sale at $4.6 each has eliminated 1.5 million shares from the insider’s portfolio position. Meanwhile, shares have recorded -21.96 percent decrease since the transaction was reported. The insider now is left with 87.42 million shares remaining in the account. Stevens Brian, who performs the CAO & Treasurer job, sold 15 thousand shares for $69.3 thousand. The disposal occurred on 05/24/2018 was priced at $4.62 per share. The share price plunged -22.29 percent since the reporting date. Stevens Brian now left with a stake of 220.48 thousand GRPN stock worth $791.54 thousand after the insider selling.

Groupon, Inc. (GRPN) is expected to jump by 15.88 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $6-month high price target. This represents a whopping 67.13 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $4.3, which represents a return potential of 19.78 percent when compared to the closing price of the stock of $3.59 on Friday, January 11. The lowest price target for the stock is $2.9 — slightly more than -19.22 percent from GRPN’s current share price.

The shares are currently floating around the first support level of $3.53. Below this, the next support is placed in the zone of $3.47. Till the time, the GRPN stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 71.22 on daily chart, which may remain a cause for concern. If the price breaks below $3.47 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $3.63 mark may result into a pull-back move towards $3.67 level.

GRPN shares accumulated 0.02 points or 0.56 percent on Friday to $3.59 with a light trade volume of 4.647 million shares. After opening the session at $3.54, the shares went as high as $3.61 and as low as $3.51, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $2.04 billion and now has 567.6 million shares outstanding. Groupon, Inc. (GRPN) stock has gained 17.32 percent of market value in 21 trading days.

GRPN stock has a trailing 3-year beta of 1.3, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$0.03 a share in the trailing twelve months. The stock’s value has surged 12.19 percent year to date (YTD) against a decline of -29.47 percent in 12 month’s time. The company’s shares still trade -36.46 percent away from its 1-year high of $5.65 and 28.21 percent up from 52-week low of $2.80. The average consensus rating on the company is 2.8, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of Groupon, Inc. (GRPN) are trading at a P/E ratio of 0 times earnings reported for the past 12 months. The industry GRPN operates in has an average P/E of 25.51. Its P/E ratio went as low as 0X and as high as 0 over the 5-year span. Further, it is sporting a 0.75 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.32. 49.5 percent is the gross profit margin for Groupon, Inc. and operating margin sits at 1.1 percent. Along with this, the net profit margin is -0.4 percent.