Piper Jaffray analyst Samuel Kemp provides commentary on Groupon Inc (NASDAQ:GRPN) after having recently traveled with its management team. Following conversations with GRPN management, Kemp has come away increasingly bullish on the daily deals giant, in light of efforts to reign in focus on only geographies/products/services where it can score success.

Subsequently, Kemp reiterates an Overweight rating on GRPN with a price target of $6.50, which represents an 18% increase from where the stock is currently trading. In fact, Kemp is confident that this new focus will drive 2018 earnings to outclass the Street by 10%.

Even after three consecutive quarters where GRPN has demonstrated accelerating customer acquisition, consensus remains bearish in it model of gross profit growth. Yet, Kemp is positive that Groupon is on solid track to add about four million customers per year in North America, which just through this addition should lead to $250 million in incremental gross profit by 2018, significantly topping the Street at $180 million in growth.

Kemp comments, “The years of poor execution and scatterbrained mgmt remain in the rear-view mirror for many investors, despite the company’s significant strategic shifts to narrow focus onto key operating practices. Isolating the key elements of running a solid business has included exiting nearly half of the countries the company had a presence in, eliminating non-core endeavors (i.e., payment processing), pursuing highly disciplined revenue growth, and increasing the internal leverage of the scale/platform components of the business.”

Though Kemp recognizes short-term consequences, he still believes Groupon is playing the game smart long-term.

According to TipRanks, analyst Samuel Kemp is ranked #1,343 out of 4,124 analysts. Kemp has a 67% success rate and earns 11.8% in his annual returns. When recommending GRPN, Kemp realizes 84.2% in average profits on the stock.

Tipranks analytics demonstrate GRPN as a Hold. Based on 9 analysts polled in the last 3 months, 2 rate a Buy on GRPN, 5 maintain a Hold, while 2 issue a Sell. The consensus price target stands at $4.76, marking just under a 14% downside from where the shares last closed.

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