Groupon (GRPN) Stock: Skyrockets After-Hours On Earnings!

Groupon Inc Common Stock (NASDAQ: GRPN)

Groupon hasn’t had the best time in the market over the past year. However, today, the stock is soaring in a big way in after hours trading. The gains are coming for good reason. The company reported earnings today after the closing bell, beating expectations. Perhaps more important, guidance was increased. Today, we’ll talk about what we saw from the report, how the market reacted to the news, and what we can expect to see from GRPN moving forward. So, let’s get right to it…

GRPN Reports Positive Earnings

As mentioned above, Groupon is having an incredible time in after-hours trading today after reporting its results for the second quarter. Here’s what we saw from the report…

  • Earnings Per Share – In terms of earnings per share, GRPN definitely did not disappoint. During the second quarter, analysts expected that the company would generate a loss of $0.02 per share. However, the company actually reported earnings at a loss of $0.01 per share, cutting estimated losses in half.
  • Revenue – Revenue also came in well ahead of expectations, proving to be another big positive for GRPN. During the quarter, analysts expected that the company would generate revenue in the amount of $711.2 million. However, the company actually reported that it generated revenue in the amount of $756 million for the quarter.
  • Guidance – As if strong revenue and earnings weren’t quite enough to excite investors, Groupon also reported incredibly positive news with regard to guidance. The company said that for the fiscal 2016 year, it now expects revenue to come in between $3.0 and $3.1 billion. This is incredibly positive, given that the previous guidance was that revenue would come in between $2.75 and $3.05 billion for the year. Not to mention, it stays on the high side of analyst estimates, currently at an average of $3.02 billion for the year.

How The Market Reacted To The News

As investors, one of the first things that we learn is that the news moves the market. Any time positive news is released with regard to a publicly traded company, we can expect to see gains in the value of the stock associated with the company as a result. Adversely, negative news will generally lead to negative movements in the market. The news surrounding GRPN today proved to be overwhelmingly positive. As a result, we’re seeing strong movement from the stock in after-hours trading today. Currently, the stock is trading at $4.60 per share after a gain of $0.82 per share or 21.69% so far in after-hours trading.

What We Can expect To See Moving Forward

Moving forward, I have a relatively bullish opinion of what we can expect to see from Groupon stock. While there are concerns with regard to the company’s ability to capitalize in an increasingly competitive market, things seem to be going in a positive direction. Recent restructuring of the company is proving to be positive, and possibly making the company more appealing as an acquisition target. All in all, things are starting to look positive for GRPN in my opinion.

What Do You Think?

Where do you think GRPN is headed moving forward? Join the discussion in the comments below!