Shares of Groupon GRPN faced another challenging day on the market Monday as the stock fell about 2.2% by mid-afternoon trading hours. However, with the holiday shopping season upon us, many investors are beginning to think that the recent dip in GRPN presents a great buying opportunity.
Groupon operates online local commerce marketplaces that connect merchants to consumers by offering goods and services throughout North America. Over the past few years, the company has grown from a seller of coupons to a full-service e-commerce business that offers everything from apparel to all-inclusive vacations.
Despite the sluggish performance of its stock recently, Groupon may still be positioned to succeed in the near-term for a variety of reasons. First of all, it will benefit from the latest shopping trends, which show greater numbers of consumers opting to do their holiday shopping online. Although Groupon is limited in scope compared to marketplaces like Amazon AMZN and eBay EBAY, it should still be able to cash in on this behavior.
Another thing to consider is the earnings estimate revision activity that has surrounded Groupon. The company has seen its current-quarter Zacks Consensus Estimate gain a penny over the last 30 days, and that means analysts are thinking that Groupon’s holiday quarter could be solid.
Furthermore, our current consensus estimates show that analysts are expecting earnings growth to return in the next quarter and the next fiscal period. As of right now, we expect Groupon to see EPS growth of 23.33% and 44.04%, respectively, in those periods.
Based on this earnings-related data, Groupon has earned itself a Zacks Rank #2 (Buy). Nevertheless, the stock has shown crazy volatility at times this year, and some investors may deem it too risky, regardless of these bullish signals.
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