Two downgrades for Groupon. Bulls focus on mobile, growth initiatives.

|By:, SA News Editor

RBC and Credit Suisse have each cut Groupon (GRPN -18.8%) to Underperform in the wake of its Q4 beat and disappointing margin data/EPS guidance. Four other firms have lowered their PTs.

RBC's Mark Mahaney is worried about softening billings growth, particularly for North American local billings (only +2% Y/Y). He also declares Groupon's forecast for only slight 2014 adjusted EBITDA growth to be well below expectations, and notes NA net customer adds were down by 300K Y/Y to 900K.

Sterne Agee's Arvind Bhatia remains bullish. He points out total revenue/billings (boosted by EMEA) beat expectations, and that its mobile users (now responsible for nearly half of all global transactions) spend more time on Groupon (on average) than its PC users. "Fourth quarter results were another reminder that turnarounds take time."

Groupon's efforts to lower its dependence on e-mail-based traffic (recently hit by the creation of a Gmail "Promotions" tab) remain pivotal to its growth strategy. The company mentioned on its CC (transcript) 8% of its December North American traffic came from search, a 25% quarterly increase, and that "customers that searched spent over 50% more than those that did not."