Groupon (NASDAQ:GRPN) is posting big gains ahead of Tuesday's Q2 report. With over 1/5 of the float shorted as of July 15, and shares down 45% YTD going into today, short-covering is likely playing a big role.
Groupon crashed in May following its Q1 report, as investors registered disappointment with soft Q2 EPS guidance caused in part by surging marketing spend. A mix shift towards lower-margin Goods sales has also been pressuring Groupon's bottom line.
"Investors will be looking for signs of improvement on three key metrics; revenue growth in local, improvement in goods gross margins and, progress in international operations," says Sterne Agee's Arvind Bhatia in advance of the Q2 report. Shares now only go for 1.5x 2014E sales.