What Makes Groupon (GRPN) a New Strong Buy Stock

Core Viewpoint - Groupon has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Outlook - The Zacks Consensus Estimate for Groupon's earnings per share (EPS) for the fiscal year ending December 2024 is projected to be $0.30, reflecting a year-over-year increase of 157.7% [5]. - Over the past three months, the Zacks Consensus Estimate for Groupon has risen by 105.7%, indicating a strong upward trend in earnings estimates [5]. Impact of Earnings Estimates on Stock Prices - Changes in a company's future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [3]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, and their buying or selling actions based on these estimates can significantly influence stock prices [3]. Zacks Rating System - The Zacks Rank stock-rating system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [4]. - The upgrade of Groupon to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting a strong potential for price appreciation in the near term [7].