Groupon Analyst Says Buy, Much More Upside in Groupon Stock Price

Companies and Brands

Published: May 15, 2013 1:34 pm

It may sound too good to be true, but one analyst remains firmly positive about the recovery of Groupon, Inc. (NASDAQ: GRPN). Even after a 150% recovery from the lows in the battered daily deals stock, Stern Agee sees shares of Groupon heading much higher. Sterne Agee’s analyst Arvind Bhatia reiterated a Buy rating and a $9 share price target for the daily deals website.

Wall Street remains skeptical. As proof the consensus share price target from Wall Street is $6.13 versus $7.17 today. The management team is looking to grow bookings to $10 billion and then much higher. Stern Agee believes that management’s vision of the opportunity is much larger than anyone believes currently. The firm sees EBITDA of $259.5 million in 2012 growing to $295.9 million in 2013 and then all the way up to $439.3 million in 2014.

Stern Agee’s $9 price target for one-year out is based upon 8-times the 2015 EBITDA estimate. Be advised that $9 is the street-high price target from all analysts. After meeting with management earlier in the week, Arvind Bhatia said,

“We believe the addressable opportunity at Groupon is larger than most realize and the billings growth rate in the coming years could be stronger than most expect. We think international is on the right track and can be fixed with focused execution. Competition appears to be less severe than six months to a year ago. Groupon is in a good position to benefit from two positive secular trends in eCommerce— local and mobile.”

Groupon shares are up 4% at $7.17 against a 52-week trading range of $2.60 to $13.20. Its market cap is currently just over $4.7 billion,

Essential Tips for Investing ^(Sponsored)

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.