Shares of Groupon (GRPN) crumbled another 22% to record lows Tuesday morning after the embattled daily deals leader spooked Wall Street with a cautious revenue forecast and slower-than-expected sales growth.
The latest plunge for Groupon leaves its stock off a whopping 70% since going public last fall at a lofty $20.
A day after its mixed earnings report, a slew of analysts added to Groupon’s gloomy outlook by slashing price targets on the young Chicago company.
Groupon’s results late Monday underscore weakness in its core daily deals business even as its smaller and lower-margin merchandise division is showing some signs of life.
Groupon’s daily deals business “is slowing sharply,” analysts at Citigroup (C) wrote in a note, Dow Jones Newswires reported. “This management team doesn’t yet have an execution track record.”
In the second quarter Groupon said it earned 8 cents a share on a non-GAAP basis, besting calls from analysts for 3 cents a share.
However, sales rose 45% to $568.3 million, trailing the Street’s view for $573 million and the high end of its own guidance.
Groupon projected third-quarter revenue of $580 million to $620 million, the midpoint of which would narrowly miss estimates for $604.5 million.
After upgrading Groupon to “buy” in May, Citi downgraded the stock this week to “neutral” and slashed its price target to $9 from $19.
Wall Street pounded Groupon’s shares on Tuesday, sending them tumbling 22.5% to $5.85.
A number of other young Internet companies have seen their share prices retreat sharply in the wake of highly-anticipated initial public offerings, including Facebook (FB), Zynga (ZNGA) and Pandora (P).