On Monday, Goldman Sachs analyst Eric Sheridan updated the firm’s stance on Groupon, Inc. (NASDAQ:GRPN), increasing the price target to $15.00, up from the previous $15.00, while still holding a Sell rating on the shares. With the stock currently trading at $24.99 and analyst targets ranging from $9 to $27, investors seeking deeper insights can access comprehensive valuation analysis through InvestingPro. This adjustment follows Groupon’s first-quarter earnings report for 2025, which showcased several key developments within the company.
Groupon’s Q1 performance revealed that both billings and adjusted EBITDA surpassed the upper end of the company’s guidance. The company maintains impressive gross profit margins of 90.42%, according to InvestingPro data. A notable highlight was the acceleration of North America Local Billings, which grew by 11% year-over-year (YoY), marking the first instance of double-digit growth in this segment since 2017, excluding periods of COVID-19 reopening comparisons.
Despite the recent sale of Giftcloud in April for €15.5 million—a transaction expected to reduce 2025’s revenue and adjusted EBITDA by $6 million and $4 million, respectively—Groupon has maintained its revenue and adjusted EBITDA guidance for 2025. This suggests an anticipated stronger performance from the company’s core operations.
Sheridan also pointed out the positive aspects of Groupon’s platform, including an improved supply position that has been driving better demand. Evidence of this is seen in the growth of brands on the platform, with those generating over $1 million in North America billings increasing by 43% YoY in the quarter.
The analyst acknowledged the progress Groupon has made over the past 18 months under the leadership of the current CEO, who took the helm in March 2023. The company has seen significant improvements in its financial position and has executed well on the repositioning of its core Local business, reflected in its remarkable YTD return of 105.68%. For a complete analysis of Groupon’s potential, including 12 additional ProTips and extensive financial metrics, visit InvestingPro. This progress has led to the revised 12-month price target of $15, a substantial increase from the prior target of $9.
In other recent news, Groupon has reported a strong start to 2025, exceeding Wall Street expectations with its first-quarter earnings. The company posted an earnings per share (EPS) of $0.17, significantly surpassing the forecast of -$0.10, and achieved revenue of $117.19 million, beating the anticipated $115.67 million. Alongside these financial results, Groupon has raised its full-year billings growth guidance from 2-4% to 3-5%, indicating confidence in its strategic initiatives. The company is focusing on platform modernization and AI integration to enhance customer and merchant engagement. Groupon’s North America Local billings grew by 11% year-over-year, reflecting the company’s efforts to modernize its platform. Analysts have shown interest in the company’s international market strategies and the impact of the GiftCloud sale, which was completed recently. The sale of GiftCloud is expected to strengthen Groupon’s cash position, with the company maintaining its revenue and adjusted EBITDA guidance despite the divestiture.
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