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,
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