Groupon saw its shares go up by over 10 percent to its highest level in almost a year Friday after analysts showed optimism after the company changed its strategy. The biggest coupon company in the world got its analyst ratings changed from hold to buy as well as its price target a share from $10 to $18.
Ros Sandler, analyst from the Deutsche Bank, said he expects the company to grow from its present user base of more than 200 million subscribers by providing more personalized deals and through the expansion of Groupon Goods, which is the company’s product deals.
Sandler predicts that Groupon could grow by 20 percent on its shift towards a less-direct marketing strategy that has been on-going over the last couple of years. He also estimated earnings to go up as much as 30percent above the current expectations in 2015.
The Deutsche bank analysts said they see a new Groupon in its fifth year. They saw several new growth drivers that would bolster the coupon company in the next six years.
In the past, Groupon sent out daily emails to its subscribers offering large discounts on services found in the local market such as manicures, hair care, restaurants, and more. The company changed its strategy by building a large database of deals that could be searched on the web site.
The new strategy by Groupon could help drive more growth for the company since it can now provide more deals to the customers. The company also offer more deals from larger stores via its online marketing such as Google search advertising.
This change in pull technology compared with the original push approach changes the competition. Investors awarded the company during Friday’s afternoon trading with Groupon’s shares going up 13 percent to $7.76. Its highest during the session was $8.03, which was the highest price since July 2012.