Retail

Why Coupons.com Is Killing Coupon and Deals Stocks

It would appear that stocks that deal in coupons were hit hard Tuesday morning following less than stellar earnings reports. In a business where cutting costs is the key, it would appear that both Coupons.com Inc. (NYSE: COUP) and RetailMeNot Inc. (NASDAQ: SALE) suffered on weaker-than-expected guidance.

Coupons.com reported its fourth-quarter financial results Monday after the markets closed. The coupon giant had -$0.2 in earnings per share (EPS) and $60.0 million in revenue.

For the first quarter, the company expects total revenue to be in the range of $52.0 million of $54.0 million. Thomson Reuters has a consensus estimate of $66.33 million for the first quarter.

Steven Boal, president and CEO of Coupons.com, commented on the full year:

2014 marked a very successful year, delivering on several key milestones and laying the foundation for continued growth. We delivered 32% revenue growth over last year, with solid momentum in all areas of our business. Our Retailer iQ platform is performing well, demonstrating scale in transaction volumes, consumer adoption, and mobile usage. As we enter 2015, we’re excited about the business and our position as a leader in the transformational shift from offline to digital. We believe our focus on data analytics, scaling our network, and mobile engagement will continue to drive our business as we digitally connect retailers, brands and shoppers.

Shares of Coupons.com closed Monday down 1.3% at $14.51. In early trading, shares were down a whopping 33% at $9.70. The stock has a consensus analyst price target of $21.75 and a previous 52-week trading range of $11.61 to $33.00.

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RetailMeNot faced the same issues when it reported earnings before the markets opened Tuesday. The company reported $0.26 in EPS and $87.4 million in revenues.

For the first quarter, net revenues are expected to be in the range of $57.0 million to $60.0 million, compared to a consensus estimate of $86.10 million.

In this time, RetailMeNot grew its monthly mobile unique visitors by 78% to a total of 21.2 million. On the year, global subscribers grew by 105% to 35.1 million and total visits was 697.1 million.

Shares of RetailMeNot fell by roughly 11% to $13.75 in morning trading on Tuesday following the earnings report. Its consensus price target is $25.60 and its 52-week range is $13.29 to $48.73.

In addition, Groupon Inc. (NASDAQ: GRPN) is set to report its earnings Thursday. The consensus estimates are for EPS of $0.03 and revenue of $909.74 million. At the beginning of February, Groupon was raised to Buy, all the way up from a Sell rating, at a boutique firm named Ascendiant Capital Markets. Shares tried to rally 2% initially following the call, but the realization that Ascendiant probably does not create millions on millions in share volume of new stock purchases based on its research kept the stock from running handily.

Groupon shares were up fractionally at $7.51 just after the opening bell. The consensus price target is $8.61. Shares have traded between $5.18 and $10.88 in the past year.

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