{"id":28797,"date":"2016-02-10T14:40:42","date_gmt":"2016-02-10T20:40:42","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=28797"},"modified":"2016-02-11T17:28:35","modified_gmt":"2016-02-11T23:28:35","slug":"groupons-new-leadership-sparks-hope","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/groupons-new-leadership-sparks-hope\/","title":{"rendered":"Groupon’s new leadership sparks hope"},"content":{"rendered":"

By Xiumei Dong<\/a><\/strong><\/p>\n

Groupon Inc. is stepping up big this Valentine\u2019s Day with promotion specials that offer lovers the chance to buy land on Mars. As the Chicago company restructures its leadership team, analysts see\u00a0a slight hope for the stock in 2016.<\/p>\n

Four analysts rate Groupon a buy, two analysts rate it a sell, and 15 rate it a hold, according to Bloomberg. The consensus target price for Groupon is $3.19. The stock closed Tuesday at\u00a0$2.22, an all-time low.<\/p>\n

\u201cGRPN has a great shot to carry over its end-of-year momentum into 2016,\u201d wrote Brian Nichols, research analyst\u00a0at Seeking Alpha, on Dec. 27, 2015. \u201cNot only is the stock cheap\u2026but its Groupon Goods business continues to perform quite well.\u201d<\/p>\n

<\/p>\n

Groupon operates online local commerce marketplaces that connect merchants to consumers by offering goods and services at a discount.\u00a0After the post-IPO stock price high of $31.41 in 2011, the stock tanked.<\/p>\n

\u201cJust looking at the stock chart, it says a lot about the company,\u201d said Edward Woo, a senior\u00a0analyst at Ascendiant Capital Markets, in an interview. \u201cThey had a big IPO, then had a big decline, and a big rebound, and another big decline\u2026\u201d<\/p>\n

Groupon historical stock prices<\/h2>\n

[field name=”chart”]<\/p>\n

Groupon Inc. stock closing prices since Nov. 04, 2011. (Xiumei Dong\/Medill)<\/div>\n

The company has a market cap of $1.37 billion and a price-to-earnings ratio of 19.61, compared to 16.86 for the Standard and Poor’s 500 index.<\/p>\n

\u201cGiven what we are today, I would still see that as a buy,\u201d said Woo, who\u00a0has a $4 price target on Groupon. Woo expects the company will have another strong earnings report\u00a0from the holidays,\u00a0helped by a\u00a0streamlining of\u00a0international operations, and by accelerated growth in Europe.<\/p>\n

Groupon reported a 4 percent increase in active customers worldwide, to 48.6 million,\u00a0in the\u00a0third quarter of 2015, comprising 25.2 million in North America, 15.4 million in Europe, the Middle East and Africa, and 8.0 million in rest of the world.<\/p>\n

\u201cOur business is actually stronger than it ever has been,\u201d said Zachary Smith, director of Mobile Products at Groupon, at the Chicago Chief Digital Forum in November. \u201cLast year, we sold 100 million Groupons worldwide. We\u2019ll hopefully beat that this Q4 as well.\u201d Groupon is slated to report\u00a0fourth quarter\u00a02015 earnings after the\u00a0close on Thursday.<\/p>\n

Groupon had a net loss of $27.6 million, or 4 cents per diluted share, in the third quarter. The loss swelled 30 percent as compared\u00a0with\u00a0 $21.2 million, or 3 cents per share, in the year-earlier quarter. Analysts surveyed by Yahoo Finance had been expecting a quarterly profit of 2 cents per share.<\/p>\n

Revenue declined 0.1 percent to $713.6 million from $714.3 million.<\/p>\n

For the fourth quarter of 2015, Groupon expects revenue of between $815 million and $865 million. It reported revenues of $925.4 million in the fourth quarter of 2014. The company attributed the lower guidance to the unfavorable impact of exchange rates. Analysts expect the fourth quarter to be break-even.<\/p>\n

Groupon rejected Google’s $5 billion offer in November 2010, and filed for an initial public offering in June 2011. Since the IPO, the company has struggled to meet the public\u2019s expectation.<\/p>\n

\u201cGroupon is a misunderstood company. We\u2019re misunderstood by analysts. We\u2019re misunderstood by media. We\u2019re misunderstood by consumers,\u201d CEO Rich Williams said in a blog post<\/a> shortly after he was elevated from chief operating officer last November.<\/p>\n

As the new CEO, Williams vowed to shift the marketing strategy and simplify the business model<\/a>, and has made drastic high-level management changes<\/a>.<\/p>\n

William appointed Jay Sullivan as the chief product officer, overseeing product and engineering. Sullivan joined Groupon from Mozilla\u00a0where he was\u00a0senior vice president of consumer product.<\/p>\n

Aaron Cooper, who had led the company\u2019s North American Goods business, now heads up North American Services, which comprises Groupon\u2019s multibillion-dollar local and travel business. Jacob Hawkins, former vice president of e-commerce at A\u00e9ropostale Inc., joined Groupon to succeed Cooper in North American Goods.<\/p>\n

\u201cGroupon will be focused on driving a diverse assortment of product across categories,\u201d said Steve Tzeng, a consumer electronics buyer of Groupon. \u201cWith our strength of connecting with local businesses, we\u2019ll be able to establish a local supply for customers.\u201d<\/p>\n

Groupon has been pushing to drive business in North America and other key markets, while paring down operations in Asia. In May, Groupon sold 46 percent of its stake in Ticket Monster<\/a>,\u00a0a South Korean e-commerce business.<\/p>\n

\u201cThey actually shrank a\u00a0lot internationally, they pulled out of\u00a0a lot of emerging markets. They still show interest in India and Korea,\u201d said Woo. \u201cSo, they are really just focusing on Europe, another big market besides the\u00a0U.S.\u201d<\/p>\n

Photo at top: Groupon Corporate Headquarters at 600 W. Chicago Ave., Chicago. (Xiumei Dong\/Medill)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Xiumei Dong Groupon Inc. is stepping up big this Valentine\u2019s Day with promotion specials that offer lovers the chance to buy land on Mars. As the Chicago company restructures its leadership team, analysts see\u00a0a slight hope for the stock in 2016. Four analysts rate Groupon a buy, two analysts rate it a sell, and […]<\/p>\n","protected":false},"author":228,"featured_media":28811,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,585],"tags":[1252,1250,1251],"class_list":["post-28797","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-winter-2016","tag-e-commerce","tag-groupon","tag-rich-williams"],"yoast_head":"\nGroupon's new leadership sparks hope - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/groupons-new-leadership-sparks-hope\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Groupon's new leadership sparks hope - Medill Reports Chicago\" \/>\n<meta property=\"og:description\" content=\"By Xiumei Dong Groupon Inc. is stepping up big this Valentine\u2019s Day with promotion specials that offer lovers the chance to buy land on Mars. 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