Groupon (GRPN) Gets an Upgrade

Chicago, Illinois-based coupon service Groupon (GRPN, $3.85, up $0.36) surged 10.32% after an analyst upgraded the stock to overweight from neutral, and raised its 1-year price target to $6. The company plans to spend $150-$200 million more for marketing in 2016 than in 2015.

The increased marketing will largely be in the U.S. The analyst believes this would attract 3.5-4.5 million new active accounts in 2016, and the company would also attract similar numbers in 2017. This is believed to add annualized gross profit of $215-$280 million. In 2015, the company had a gross profit of $1.385 billion.

On April 28, the $2.18 billion company reported 1st quarter results that beat on earnings and revenue. It reported earnings per share (EPS) of -$0.01 on $731.97 million in revenue, compared to EPS of $0.03 on $750.4 million in revenue a year ago. Analysts had expected EPS of -$0.02 on $718.36 million in revenue.

For the 2nd quarter, which it reports on July 27 after the close, analysts are expecting EPS of -$0.02 on $710.97 million in revenue, compared to EPS of $0.02 on $738.4 million in revenue a year ago. For full year fiscal 2016, the company forecasts revenue of $2.75-$3.05 billion.

Analysts estimate EPS of $0.20 on $2.97 billion in revenue, compared to EPS of $0.14 on $3.12 billion in revenue in 2015. Analysts give the stock a 1-year price target of $4.07. High target is $6. The stock has no trailing PE, a forward PE of 72.64, price/book of 5.83, price/sales of 0.74, and a current ratio of 0.81. Short interest is 12.81%, which means that shares could see a short squeeze on good news.

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Leading Brands (LBIX) Signs Deal With China

Vancouver-based healthy beverage distributor Leading Brands (LBIX, $2.02, up $0.33) surged 19.52% after the company said that it signed an agreement to supply 500 milliliter bottles and 5 liter WaterBoxes of its HappyWater bottled water to a significant customer in China. Happy Water is a natural alkaline blend sourced from the Halcyon Spring and the Mount Woodside Spring in the Canadian mountains of British Columbia. The water is advertised as having a pH of 7.4, which is ideal for the body, and contains natural minerals and electrolytes. The first shipment is expected in third quarter.

Besides HappyWater, the $5.77 million company sells brands TrueBlue, PureBlue, TrueBlack, and Canada FreshAir, and distributes its beverages in Canada, the western United States, and Asia. On June 14, the company reported 1st quarter earnings per share (EPS) of C$0.10 on C$2.85 million in revenue, compared to EPS of -C$0.15 on C$3.20 million in revenue a year ago. Gross margin rose to 38.7% compared to 31.1% a year ago. HappyWater sales jumped 38%. In the 2nd quarter 2015, the company had EPS of C$0.07 on C$3.78 million in revenue. For full year fiscal 2015, the company had EPS of -C$0.45 on C$11.01 million in revenue, compared to EPS of C$0.04 on C$13.86 million in revenue a year ago. The only analyst following the company gives the stock a 1-year price target of $4.40. The stock has no trailing PE, no forward PE, price/sales of 0.69, and a current ratio of 1.56. Short interest is 0.05%, which means that short sellers probably do not think the stock will fall much.

Apple (AAPL) Stock Volatile Ahead Of WWDC

Shares of Apple (APPL) are below $100 and ahead of Monday's developers conference and could be volatile following the update.

California-based video game developer and publisher Electronic Arts (EA, $73.38, up $8.84) surged 13.70% after the company reported 4th quarter fiscal 2016 results that beat on both earnings and revenue.  For the quarter ending March 31, it reported earnings per share (EPS) of $0.50 on $924 million in revenue, compared to EPS of $0.39 on $896 million in revenue a year ago.  Analysts had expected EPS of $0.42 on $889 million in revenue.  For the 1st quarter fiscal 2017, the company forecasts EPS of -$0.05 on $640 million in revenue, compared to EPS of $0.15 on $693 million in revenue a year ago.  Analysts are expecting EPS of -$0.02 on $657 million in revenue.  For full year fiscal 2016, the company had EPS of $3.13 on $4.3 billion in revenue, compared to EPS of $2.51 on $4.0 billion in revenue a year ago.  For full year fiscal 2017, the company forecasts EPS of $3.50 on $4.9 in revenue.  Analysts are expecting EPS of $3.46 on $4.8 billion in revenue.

 

The $22.70 billion company develops and sells video games for consoles, computers, and mobile devices.  Its Star Wars and sports games helped boost revenue.  As of the end of March, it had sold more than 14 million copies of Star Wars Battlefront to retailers.  It is planning to sell sequels in the future.  Its Madden NFL Mobile game saw monthly active users rise 30% from a year ago.  The company’s digital sales were up 18% to $712 million (55% of revenue) from a year ago.  Analysts give the stock a 1-year price target of $83.40, but that could rise in the near future.  High target is $105.  The stock has a trailing PE of 37.57, forward PE of 18.03, PEG of 1.38, and price/sales of 4.67.  Short interest is 7.24%, which means that the stock could see a short squeeze on good news.

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