Groupon Finally Being Rewarded For 16 Of 17 EPS Beats

Groupon Inc GRPN stumbled out of the gate following its 2011 IPO price as the company failed to gain the market traction many had anticipated. However, a recent rally once again has Groupon bulls optimistic.

Rough Ride

After going public at $20 per share and peaking at just above $31 in its first month of trading, Groupon stock took a nosedive that carried it as low as $2.15 in early 2016. Since that time, Groupon traded mostly sideways in a wide range between $3 and $6, but its latest run has the stock at the high end of the range and up more than 63 percent in the past six months.

It looked like the latest run, which started off of the stock’s $2.90 low back in June, may be coming to an end in October. Groupon dipped from $5.34 down to $4.49 on rumors that the company had cancelled its presentation at the Credit Suisse Tech Media Telecom Conference. However, the rally got back on track in late October after Benzinga confirmed with the company that Groupon had never registered for the conference to begin with and didn’t follow-up on the event because “schedules weren’t lining up.”

Where Will It Go?

From a fundamental picture, Groupon has been able to consistently deliver earnings beats on 16 of the past 17 quarters. However, trailing 12-month revenue is down 1.2 percent overall in the past three years.

Groupon stock has peaked at $5.63 on Nov. 6 and has now reached a critical region on the chart. If the stock can break out above $6, it would break out of its two tear trading range and could be headed back to re-test late-2015 resistance at $8.43.

If Groupon can’t pierce its $6 ceiling, it may soon be headed back down to the $3 floor of the trading range.

Joel Elconin contributed to this report.

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Image credit: Rusty Clark ~ 100K Photos, Flickr