Bullish stock to watch: Groupon Inc Common Stock (NASDAQ: GRPN)

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Groupon Inc Common Stock (NASDAQ: GRPN) stock rose over 2.4% in the pre-market session of Feb 20th, 2020 (Source: Google finance). The company also appointed Melissa Thomas as their chief financial officer, and plans to pursue a reverse-stock split to raise the price of its stock at a ratio of between 1-for-10 and 1-for-12. The company currently expects the reverse stock split to be effective by the end of the second quarter. Groupon has reported the net income of $77 million in the fourth quarter, compared to net income of $46.2 million in the year-ago fourth quarter.

The company reported disappointing fourth-quarter revenue and said it planned to exit the Goods category in North America by the third quarter and globally by the end of the year, so it can focus on the $1 trillion “local experiences” market. North America gross profit in the fourth quarter 2019 had declined 16% to $207.3 million mainly due to fewer customers, lower traffic and increased competition in the Goods category. The decline was partially offset by higher gross profit per customer. In Local, gross profit fell  6% to $169.7 million. Goods gross profit declined 45% to $30.6 million. Gross profit in Travel fell 41% to $6.9 million.

GRPN in the fourth quarter of FY 19 has reported the adjusted earnings per share of 13 cents, missing the analysts’ estimates for the adjusted earnings per share of 12 cents, according to analysts surveyed by FactSet. The company had reported 23% decline the adjusted revenue to $612.3 million in the fourth quarter of FY 19, missing the analysts’ estimates for revenue of $705 million. Gross profit fell 15% to $310 million in the fourth quarter 2019. Adjusted EBITDA decreased to $83.8 million in the fourth quarter 2019, from $104.6 million in the fourth quarter 2018. Global units sold had fallen 16% to 42.6 million in the fourth quarter 2019 mainly due to fewer customers and lower traffic. North America units had fallen 11% in Local and down 32% in Goods. International units grew 4% in Local and down 22% in Goods.  The company had generated the operating cash flow of $71.3 million for full year 2019, and free cash flow, a non-GAAP financial measure, was $4.0 million for the full year 2019. The company’s cash and cash equivalents as of December 31, 2019 were $750.9 million, and the company has no outstanding borrowings under the $400 million revolving credit facility.

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