Orlando, FL 6/18/12 (StreetBeat) – Groupon (Nasdaq: GRPN) shares are getting a lift Monday morning from Morgan Stanley analyst Scott Devitt, who raised his rating on the daily deals company to Overweight from Equal Weight. His target on the stock is $18. The stock closed Friday at $10.06.“Groupon has emerged as the leading local e-commerce company in an industry with significant barriers to scale,” he writes in a research note. “Its advantage due to scale (largest merchant and customer base) and technology (8 acquisitions year to date) has enabled it to accelerate North American revenue growth while improving its margins.”
Devitt writes that the company has deployed systems in the U.S. that enhance the company’s ability “to send relevant and personalized deals.” Expansion of better personalization in international markets is likely to follow.
Meanwhile, Devitt says he remains positive on four key “debates” on Groupon shares.
He thinks the company can:
• Preserve its competitive position as local e-commerce leader…
• Maintain a ~40% take rate within daily deals segment…
• Continue to grow revenue while expanding margins and…
• Avoid deal fatigue by continuing to improve targeting and personalization.
Groupon this morning is up 40 cents, or 4%, to $10.46.
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