Strength Seen in Groupon (GRPN): Can Its 24.9% Jump Turn into More Strength?

Groupon GRPN shares soared 24.9% in the last trading session to close at $22.88. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 14.6% loss over the past four weeks.

Groupon is gaining momentum from its AI-native transformation, improving customer engagement, recovering marketing channels, modernized platforms, disciplined share repurchases, and confidence in second-half execution, supporting stronger long-term growth prospects.

This online daily deal service is expected to post quarterly loss of $0.07 per share in its upcoming report, which represents a year-over-year change of -115.2%. Revenues are expected to be $127.42 million, up 1.4% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Groupon, the consensus EPS estimate for the quarter has been revised 2100% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on GRPN going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Groupon belongs to the Zacks Internet - Commerce industry. Another stock from the same industry, TripAdvisor TRIP, closed the last trading session 1.4% lower at $12.8. Over the past month, TRIP has returned 27.4%.

For TripAdvisor, the consensus EPS estimate for the upcoming report has changed -5.5% over the past month to $0.42. This represents a change of -8.7% from what the company reported a year ago. TripAdvisor currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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