There's been a major selloff in Groupon, Inc. (NASDAQ:GRPN) shares in the week since it released its quarterly report, with the stock down 24% to US$8.26. Revenues of US$114m reported a marginal miss, falling short of forecasts by 2.9%, but earnings were better than expected - statutory profits came in at US$0.33 per share, a nice change from the loss the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Groupon after the latest results.

Taking into account the latest results, Groupon's three analysts currently expect revenues in 2025 to be US$503.4m, approximately in line with the last 12 months. Statutory earnings per share are predicted to soar 54% to US$0.75. In the lead-up to this report, the analysts had been modelling revenues of US$537.6m and earnings per share (EPS) of US$0.64 in 2025. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the substantial gain in to the earnings per share numbers.

There's been no real change to the average price target of US$18.00, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Groupon analyst has a price target of US$22.00 per share, while the most pessimistic values it at US$11.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's also worth noting that the years of declining revenue look to have come to an end, with the forecast stauing flat to the end of 2025. Historically, Groupon's top line has shrunk approximately 35% annually over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 10% annually. So it's pretty clear that, although revenues are improving, Groupon is still expected to grow slower than the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Groupon's earnings potential next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. With that said, earnings are more important to the long-term value of the business. The consensus price target held steady at US$18.00, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Groupon going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 4 warning signs for Groupon (1 is a bit unpleasant) you should be aware of.

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