Analysts are weighing in on the consumer deals company Groupon Inc (NASDAQ:GRPN) and solar power systems company Enphase Energy Inc (NASDAQ:ENPH), as shares of both companies plunged sharply today after reporting disappointing earnings and guidance.
Groupon shares are down nearly 36% after the company reported weaker-than-expected quarterly revenues and issued a disappointing sales guidance. The company also announced that CEO and co-founder Eric Lefkofsky would step down, and Rich Williams would take over the company.
Adding insult to injury, Piper Jaffray analyst Gene Munster downgraded shares of Groupon from an Overweight to a Neutral rating, while slashing the price target to $2.50 (from $7.50), which implies a downside of 12% from current levels.
Munster commented, “Groupon reported Sep-15 revenue 3% below the Street and EBITDA inline with the Street. GRPN guided down Dec-15 revenue by 12% and EBITDA by 50%, while 2016 guidance was 17% and 69% below consensus, respectively, as it makes several shifts in the business; this includes increasing marketing spend, reducing international exposure and reducing mix of electronics inside shopping. At the core of our downgrade is a belief that Groupon should be more focused at improving the product and less focused on marketing. We understand the company’s investment in marketing approach but do not believe it solves the company’s underlying challenge, which is building a more compelling product that virally attracts users.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Gene Munster has a total average return of 24.6% and a 70.9% success rate. Munster has a -7.4% average return when recommending GRPN, and is ranked #1 out of 3824 analysts.
Out of the 18 analysts polled by TipRanks, 7 rate Groupon stock a Buy, 9 rate the stock a Hold and 2 recommend a Sell. With a return potential of 98%, the stock’s consensus target price stands at $5.64.
Enphase Energy Inc
In a research report released today, Canaccord analyst Jonathan Dorsheimer downgraded shares of Enphase Energy from a Buy to a Hold rating, and reduced the price target to $3.30 (from $9.00), after the company reported a wider than expected third-quarter loss, and offered a fourth-quarter outlook that fell short of forecasts.
Dorsheimer noted, “Enphase issued Q4 guidance significantly below expectations citing increased pricing pressure, inventory buildup throughout the distribution channel, and softer than expected market demand. As a result, the company will be taking strategic action in an effort to right the ship. These actions include significant price reductions to reduce the current pricing premium over competitors which will hopefully lead to market share gains among tier 1 customers. We find that any increased share is more than offset by sliding demand and margins.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jonathan Dorsheimer has a total average return of -5.1% and a 39.5% success rate. Dorsheimer has a -61.6% average return when recommending ENPH, and is ranked #3606 out of 3824 analysts.
Out of the 8 analysts polled by TipRanks, one rates Enphase Energy stock a Buy, 5 rate the stock a Hold and 2 recommend a Sell. With a return potential of 196%, the stock’s consensus target price stands at $6.97.