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B. Riley Cuts Groupon, Says CFO Departure 'Makes Us Cautious' Amid Turnaround

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Benzinga's Top Upgrades, Downgrades For May 10, 2018
Earnings Scheduled For May 9, 2018

In a report published Wednesday, B. Riley analysts downgraded the rating on Groupon Inc (NASDAQ: GRPN) from Buy to Neutral, while reducing the price target from $9 to $7.

In the report B. Riley noted two reasons for the downgrade:

  1. The departure of the company's CFO, amidst a significant turnaround. This causes uncertainty regarding the trajectory of the turnaround.
  2. Increase in Coupang valuation, according to media reports, in view of the TMON sale price, which "reduces our confidence in higher than expected valuation for other Asian assets."

"As a result, we are reducing our applied multiple on 2015 AEBITDA from 12.5x to 10.0x, which is the median of other internet companies in the midst of a turnaround," the analysts said.

On Wednesday, Groupon's CFO Jason Child announced that he would be leaving the company for another opportunity on the West Coast. An interim CFO will take over while Groupon searches for a permanent CFO. Meanwhile, Groupon has filled the COO position by promoting Rich Williams, who was previously the President of North America.

Groupon has reiterated its 2Q and 2015 guidance, while increasing its share repurchase authorization by $200 million. "We are also cautious of the value of the Rest of World assets, which are on the block, but the value could be lower than expected and, hence, would not be a catalyst for the stock," the report added.

Latest Ratings for GRPN

May 2018UBSUpgradesSellNeutral
Mar 2018Morgan StanleyUpgradesUnderweightEqual-Weight
Feb 2018JP MorganMaintainsNeutralNeutral

View More Analyst Ratings for GRPN
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Posted-In: B. RileyAnalyst Color Downgrades Price Target Analyst Ratings


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