Daily deals site Groupon Inc(NASDAQ:GRPN) has a lot to prove to investors when it announces its second quarter results later in the day.
Things have not been good for the stock, which have depreciated about 60 percent from its IPO price of $20 a share last November.
Ahead of the closing bell on Monday the stock was up 3.93 per cent at $7.73, after closing at $7.44 last week.
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The company which offers daily deals on products could be facing user fatigue and analysts are concerned about its slowing growth.
The weak economy in Europe has resulted in softer billings for the company, while smaller, smarter companies like LivingSocial are making inroads into its domain.
Sterne Agee analyst, Arvind Bhatia, who recently downgraded the stock, said in a note, "Given the recent decline in the share price, we are clearly late in the downgrade." He added that the company was unlikely to see its stock price rise until analysts lowered their estimates.
Analysts expect Groupon to post earnings of 3 cents per share on revenue of $574.8 million. In May, Groupon forecast revenue of between $550 million and $590 million.
Groupon is also facing the severe backlash that social media sites have been facing in the last few months over their declining fortunes and their inability to provide clarity about their profitability margins and revenues.
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Investors are uncertain how the company will sustain its revenues with its format of daily deals that may have reached saturation points. They have also been questioning how the company plans to account for its new business ventures such as Groupon Goods.