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The investors in Groupon, Inc.'s (NASDAQ:GRPN) will be rubbing their hands together with glee today, after the share price leapt 40% to US$24.99 in the week following its first-quarter results. Although revenues of US$117m were in line with analyst expectations, Groupon surprised on the earnings front, with an unexpected (statutory) profit of US$0.17 per share a nice improvement on the losses that the analystsforecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the four analysts covering Groupon are now predicting revenues of US$500.2m in 2025. If met, this would reflect an okay 2.8% improvement in revenue compared to the last 12 months. Groupon is also expected to turn profitable, with statutory earnings of US$0.097 per share. In the lead-up to this report, the analysts had been modelling revenues of US$497.0m and earnings per share (EPS) of US$0.072 in 2025. Although the revenue estimates have not really changed, we can see there's been a very substantial lift in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
View our latest analysis for Groupon
There's been no major changes to the consensus price target of US$19.25, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Groupon, with the most bullish analyst valuing it at US$27.00 and the most bearish at US$9.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Groupon's past performance and to peers in the same industry. For example, we noticed that Groupon's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3.7% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 32% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 9.0% per year. So although Groupon's revenue growth is expected to improve, it is still expected to grow slower than the industry.