The Case for and Against Groupon (GRPN)

Groupon, Inc. (GRPN) is an interesting player in the Technology space, with a focus on Internet Information Providers. The stock has been active on the tape, currently trading at $4.69, up from yesterday’s close by 0.86%. Given the stock’s recent action, it seemed like a good time to take a closer look at the company’s recent data.

Fundamental Analysis

Groupon, Inc. (GRPN) currently trades with a market capitalization of $2.60 Billion. That value represents a market adjusting for revenues that have been falling by -6.99 % on a quarterly year/year basis as of the company’s last quarterly report.

You can get a sense of how sustainable that is by a levered free cash flow of $82.34 Million over the past twelve months. Generally speaking, earnings are expected to grow in coming quarters. Analysts are forecasting earnings of $0.03 on a per share basis this quarter. Perhaps, that suggests something about why 1.98% of the outstanding share supply is held by institutional investors.

Technical Analysis

It’s important to check the technicals to get a sense of how GRPN has been acting. Looking at the stock’s movement on the chart, Groupon, Inc. recorded a 52-week high of $5.99. It is now trading 1.3% off that level. The stock is trading $4.67 its 50-day moving average by -0.02%. The stock carved out a 52-week low down at $2.90.

In recent action, Groupon, Inc. (GRPN) has made a move of -9.46% over the past month, which has come on weak relative transaction volume. Over the trailing year, the stock is underperforming the S&P 500 by 14.04, and it’s gotten there by action that has been more volatile on a day-to-day basis than most other stocks on the exchange. In terms of the mechanics underlying that movement, traders will want to note that the stock is trading on a float of 8.06% with $401.95 Million sitting short, betting on future declines. That suggests something of the likelihood of a short squeeze in shares of GRPN.

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