Why Groupon Stock Rallied 13% at the Open Today
Shares of Groupon (NASDAQ: GRPN), an online marketer and retailer, rose a swift 13% at the start of trading on May 7. By around 10:30 a.m. EDT, the stock had given back much of that advance, however, with the gain pared to 5%. The company's after-the-close earnings release on May 6 was the primary driver here. The numbers were kind of mixed.
Groupon reported revenue of $264 million in the first quarter of 2021. That was down 29% from the same period in 2020, but was enough to beat consensus estimates. On the bottom line Groupon posted adjusted earnings of $0.25 per share for the quarter, versus an adjusted loss of $1.63 in the same stanza of 2020. Analysts had been expecting a loss of $0.58 per share. Earnings were supported by cost-cutting efforts and a nearly 45% drop in marketing expenses, which could be seen as problematic for the future. But, on the whole, it was a decent quarter even though it wasn't exactly what you'd call a smashing success, noting the year-over-year top-line decline and the marketing reductions.
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Source Fool.com
