Groupon (GRPN) Records Solid Black Friday Weekend Sales - Analyst Blog

Groupon, Inc. (GRPN) recently announced that it has witnessed record business in North America on Black Friday through Cyber Monday. The company's sales surged 25% from the year-ago period which also includes a high volume of promo code redemptions for top brands.

We believe that the convenience of online shopping has paved the way for online retailers to secure a bigger share of such weekend sales. Hence, Groupon's strong presence as one of the largest online retailers globally offers significant opportunity to the company to benefit from this rapid growth in the ecommerce market.

Further, Groupon's sales via its mobile app have surged considerably, with a growing number of consumers using their mobile devices for comparison shopping, order placement and coupon redemption in the last few days.

The company's business model that focuses on discounts and deals to drive sales has attracted many consumers.

In the last-reported quarter, 50% of the company's worldwide transactions took place via mobile devices as more than 100 million people downloaded the Groupon app. Currently, Groupon expects smartphone users to grow five-fold over the next five years, which will drive m-commerce sales.

In addition, Groupon's policy of launching new products on a regular basis is a major positive. The company's strategy of offering special deals prior to important events, like Thanksgiving, enhances its popularity. Groupon Freebies gained enormous popularity after being made available on Apple's (APPL) iOS devices. These include over 30,000 digital coupons, codes, sales, giveaways and samples from more than 6,000 brands spanning 245,000 merchant locations.

Currently, Groupon's Freebies is one the most widely distributed mobile coupon platform in the United States. The company plans to expand the offering to some key international markets in the near-term. We believe that Freebies will help Groupon to diversify its business beyond the core daily deals segment.

Groupon currently has a Zacks Rank #3 (Hold).

Key Picks from the Sector

Better-ranked stocks in this sector include Geeknet, Inc. (GKNT) and Stamps.com Inc. (STMP) sporting a Zacks Rank #1 (Strong Buy).

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