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Investing.com — Groupon Inc (NASDAQ:GRPN) shares rose more than 8% on Monday after investment research firm Prescience Point Capital raised its price target on the stock to $88.17, representing a potential 225% upside.
Prescience pointed to Groupon’s stake in mobile payments company SumUp, saying that Groupon’s “windfall could be greater than $1B,” exceeding Groupon’s current market value.
“We believe the recent news of SumUp’s proposed funding round, which confirms the significant value of Groupon’s SumUp stake, will be the spark that sets off a series of positive catalysts that will drive Groupon shares significantly higher in short order,” Prescience said in their report.
The research firm urged Groupon to reveal its percentage stake in SumUp, while also revealing that a significant shareholder told them Groupon’s former interim CEO, Aaron Cooper, said the company’s ownership share in SumUp was in the “mid-single digits.”
“Based on the new SumUp information, we are significantly raising our estimates for Groupon’s fair market value. We value Groupon’s core business at 6.0x (above current levels, well below the historical average,” said Prescience.
