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Analysts Divided On Groupon CFO Departure

Analysts Divided On Groupon CFO Departure
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Groupon Inc (NASDAQ: GRPN)'s shares were hammered by recent news of its chief financial officer's resignation, but several analysts were divided on the company's prospects Thursday.

Groupon shares are off about 5 percent in the past five trading days and changed hands recently at $5.99, down $0.16 (2.5 percent).

Early Wednesday, the company said its Chief Financial Officer Jason Child will resign at the end of July to relocate to the West Coast.

Groupon also reiterated guidance, more than doubled its buyback program to $500 million and named Richard Williams chief operating officer.

At least two analysts maintained Buy ratings on Groupon in the wake of the announcement, including Brean Capital's Tom Forte and Arvind Bhatia of Sterne Agee CRT.

The management shuffle doesn't reflect a "material change in the fundamentals" or the direction of Groupon, according to Bhatia, who maintained a $12 target.

Forte reiterated a $11 target, voicing confidence in management and saying he's "encouraged" by Groupon's guidance reiteration and increased buyback plan.

But B. Riley's Sameet Sinha downgraded Groupon to Neutral, from Buy, and said the CFO's departure in the midsts of a turnaround effort "makes us cautious on the trajectory of the turnaround."

Sinha, who cut his Groupon price target 22 percent to $7, also said the value of Groupon's Asia assets currently for sale may draw lower-than-expected bids.

Groupon agreed in April to sell a controlling stake in its South Korean e-commerce business Ticket Monster for $360 million and said last month it continues to explore
alternatives for its other Asian businesses.

Groupon missed first quarter expectations in May and its shares are off nearly 24 percent during the past three months.

The Chicago-based company was valued at a reported $19.5 billion on its first day of trading in 2011; its current market capitalization is about $4.12 billion.

Analysts on average maintain an Overweight rating and $8.59 price target on Groupon according to a poll by FactSet.

Latest Ratings for GRPN

Jan 2018Goldman SachsUpgradesSellNeutral
Nov 2017BarclaysMaintainsUnderweight
Nov 2017Morgan StanleyMaintainsUnderweight

View More Analyst Ratings for GRPN
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