Thursday, November 8, 2012

Groupon Inc (NASDAQ:GRPN) has a lot to prove to the market

The Street is keenly awaiting the third quarter results of Groupon Inc (NASDAQ:GRPN), which provides discounted deals online daily.

The company, which is set to announce its results today after market closes, has been struggling to keep itself above water as it faces scepticism over its ability to sustain revenue growth.

Is GRPN a Buy Ahead of Earnings? Find Out Here

Once hailed as the poster-boy for the second-coming of Internet companies, the stock has lost support as the company has been unable to justify that initial enthusiasm.

Lots of analysts have expressed concerns over the company's outlook for the current quarter, especially after Hurricane Sandy destroyed many small businesses, on whose custom Groupon had relied.

"An important metric to watch will be the number of active customers Groupon had as of the end of the quarter. This is defined as someone who's purchased a deal in the previous year," an AP report said.

While revenues will be keenly watched what is even more important are the gross billing, which is a measure of how much the company is able to collect from customers and pay merchants.

Analysts, on average, expect earnings of 4 cents per share on revenue of $592.1 million. In August, Groupon forecast revenue of $580 million to $620 million.

The market will be watching for an update on the two new businesses it started during the year - Groupon Goods, which functions as an ordinary e-commerce site and Groupon Payments where merchant can accept credit card payments using their iPhones or iPod Touch.

The slowdown in Europe has had an adverse effect on the company's sales there and this will be reflected in its quarterly earnings as well.

Groupon shares closed up 2.4 percent at $3.76 on Wednesday and now up another 2%.

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