Can Groupon Stock Keep Going After Last Week's 8% Pop?

It's been a welcome summer of love for Groupon (NASDAQ: GRPN) investors. Shares of the daily deals leader rose 8.4% last week, ticking higher after posting mixed quarterly results. The stock has soared 42% since bottoming out two months ago.

Groupon's results may seem disappointing at first glance. Revenue declined 8% to $662.6 million, its weakest top-line growth in Groupon's six years as a publicly traded company. Analysts were holding out for $666.8 million. The record won't last long. Its outlook for the current quarter calls for less than $650 million in revenue, a decline of at least 10% as well as a sequential dip and also below Wall Street's target of $661.7 million.

Investors still bid up the stock after the top-line miss, and this is where quality of revenue is important. Groupon's revenue has come under pressure as it backs out of unprofitable international markets. Closer to home, it's been relying less on the sale of physical goods, as a 13% dip in Groupon Goods sandbagged results. The byproduct of leaning less on weak international operations and Groupon Goods is that margins are improving dramatically. Groupon posted adjusted earnings of $0.02 a share, its third consecutive profit. Analysts were expecting Groupon to merely break even.

Source: Fool.com