On Tuesday, Groupon stock got a bullish prediction as Prescience Point Capital Management said that the stock had been overlooked by Wall Street. It gave a new price prediction and said that the stock could be priced between $63 to $98. This represents a upside that ranges from approximately 172 percent to 322.4 percent. This new price prediction is well above what other analysts have forecast.
Some of the reasons why Prescience Point Capital Management has given Groupon a higher value includes the point that market participants had overlooked Groupon’s investment in SumUp, which is a considerable one. The fintech has a 50%+ revenue CAGR. The analyst believes that it was worth at least $268 million and it was still growing and was close to 40 percent of Groupon’s enterprise value, at present.
Prescience Point Capital Management also believed that Groupon’s core business was being undervalued by the market. The company’s recent turnaround had been put into shade by shutdowns due to the pandemic. A new change in revenue recognition accounting also made it look as if its revenues decreased by 50 percent. The Goods revenue of the company was reported on a net basis rather than a gross basis. They also said that the stock had been “wrongly left for dead.”
Groupon still has roughly 24 million customers. About 15 million of these customers have used the platform for more than three years. They are the most active users. Prescience Point said that this data made a point that the company was still a force to be reckoned with. It also mentioned that only two analysts had been covering the stock showing Wall Street’s neglect of the company.
The new price prediction has helped Groupon stock see good trades on Tuesday. More than a million shares of the stock were traded, well above an average trade of 996,000 shares. The stocks have seen an 8.2 percent rise as of Tuesday morning. However, the overall stock has fallen by 29 percent this year.