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Wall Street Analysts Think Groupon (GRPN) Is a Good Investment: Is It?
ZACKSยท 2025-08-18 14:30
Group 1: Brokerage Recommendations - Groupon has an average brokerage recommendation (ABR) of 2.00, indicating a Buy, based on recommendations from five brokerage firms, with three Strong Buy and one Buy, accounting for 60% and 20% respectively [2][5] - The ABR should not be the sole basis for investment decisions, as studies show brokerage recommendations often lack success in guiding investors towards stocks with high price appreciation potential [5][10] - Analysts from brokerage firms tend to exhibit a positive bias in their ratings due to vested interests, leading to a higher number of Strong Buy recommendations compared to Strong Sell [6][10] Group 2: Zacks Rank vs. ABR - Zacks Rank is a proprietary stock rating tool that categorizes stocks from Strong Buy to Strong Sell and is based on earnings estimate revisions, making it a more effective indicator of near-term stock price performance [8][11] - Unlike ABR, which is based solely on brokerage recommendations and may not be up-to-date, Zacks Rank reflects timely changes in earnings estimates, providing a more accurate indication of future price movements [9][12] - The Zacks Consensus Estimate for Groupon has increased by 48.4% over the past month to $0.59, indicating strong analyst optimism and contributing to a Zacks Rank 1 (Strong Buy) for the stock [13][14] Group 3: Investment Implications - The combination of a Buy-equivalent ABR and a Zacks Rank 1 suggests that Groupon may present a legitimate investment opportunity for investors [14]