UPDATE: Ascendiant Raises Groupon's PT to $3.50, Despite Weak Q4 EPS and Skeptical Outlook

In a report published Thursday, Ascendiant Capital Markets reiterated a Sell rating on Groupon

, while raising its price target from $2.50 to $3.50. According to Ascendiant, "Pro forma EPS was $(0.01), compared to our and consensus estimates of $0.03. Q4 guidance was for revenue of $625 - 675 million and operating income of $0 - 20 million (which implied EPS of $0.00 – 0.03)...[M]anagement provided initial Q1 2013 guidance for revenue of $560 - 610 million and operating income of $(10) - 10 million, which is well below current consensus estimates." The report remained a cautious outlook for 2013. "We believe uncertainties with Groupon remain due to staff turnover, competition, and increased investments. In our view, the slowing growth and weak margins are likely to bolster continued skepticism as to Groupon's valuation, growth prospects, and profit potential despite its lower valuation and multiples." Groupon closed Wednesday at $5.98.