Deutsche Bank Sees Groupon Building For The Long-Term

In a report published Wednesday, Deutsche Bank analyst Ross Sandler reiterated a Buy rating and $8.00 price target on Groupon Inc (NASDAQ: GRPN).In the report, Deutsche Bank noted, “Internet marketplaces are hard to build, but once the supply/demand flywheel kicks in the growth starts to take care of itself - witnessed repeatedly in history by Amazon, Alibaba, and more recently with mobile-first companies like Uber and Airbnb. Many have argued that Groupon isn't exactly a ‘marketplace' and doesn't deserve to be in the same conversation because of its tumultuous past and low growth rates, but we look at it differently, with the history better explained by their poor original choice in distribution (email vs. PC/mobile, push vs. pull), which is for the most part behind Groupon in late 2014. Looking ahead, we see an above e-commerce grower with better unit economics and merchant centrality and satisfaction than many of its local peers, and unlike the comps actually generates meaningful EBITDA. At 0.6x 2015 GMV, 3.1x GP, and 15.8x EBITDA vs. the e-commerce peers at 0.8x, 6.5, and 20x respectively , and with the disclosure about APAC strategic options as a potential catalyst, we view the risk/reward as favorable. Buy.”Groupon Inc closed on Tuesday at $7.80.