Groupon (GRPN) AI Stock Analysis

• Market Cap: $1.05B
• Dividend Yield: N/A
• Average Volume (3M): 1.98M
• Price to Earnings (P/E): 35.5
• Beta (1Y): 1.64
• Revenue Growth: -5.76%
• EPS Growth: 21.27%
• Country: US
• Employees: 2,079
• Sector: Communication Services
• Sector Strength: 84
• Industry: Internet Content & Information
• EPS (TTM): 0.17
• Shares Outstanding: 39,816,140
• 10 Day Avg. Volume: 2,544,675
• 30 Day Avg. Volume: 1,980,641
• PEG Ratio: 0.06
• Price to Book (P/B): 25.82
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 24.90
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 0.50
• Enterprise Value/Gross Profit: 2.29
• Enterprise Value/Ebitda: 9.89
• 1Y Price Target: $22.75
• Price Target Upside: -14.09% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

Groupon's overall stock score is 60, reflecting a mixed picture. The company's financial performance is weak due to declining revenues and high leverage, but technical indicators suggest positive momentum. The positive earnings call, highlighting growth and strategic initiatives, provides optimism. However, valuation remains a concern with ongoing losses and no dividend yield.

Positive Factors

Business Transformation

The company is showing solid progress as it continues its major transformation from its old legacy business.

Earnings

Billings and Adj. EBITDA exceeded the high-end of the guide, with North America Local Billings accelerating to +11% YoY, marking the first quarter of double-digit growth since 2017.

Negative Factors

Consumer Spending Risks

There is mounting risk of volatility in discretionary consumer spending, which could impact demand for local services more broadly.

Valuation Concerns

The recent sharp increase in the share price, with GRPN now trading at 13x NTM Street Adj. EBITDA, is negatively impacting the risk-reward ratio.

Groupon Business Overview & Revenue Model

Company Description

Groupon, Inc., together with its subsidiaries, operates a marketplace that connects consumers to merchants. It operates in two segments, North America and International. The company sells goods or services on behalf of third-party merchants; and first-party goods inventory. It serves customers through its mobile applications and websites. The company was formerly known as ThePoint.com, Inc. and changed its name to Groupon, Inc. in October 2008. Groupon, Inc. was incorporated in 2008 and is headquartered in Chicago, Illinois.

How the Company Makes Money

Groupon makes money primarily through the sale of vouchers and deals that offer discounts on local services, goods, and travel. The company generates revenue by taking a commission on each deal sold, which is a percentage of the price paid by the consumer. Additionally, Groupon earns money through its Goods segment, where it sells merchandise directly to consumers, and the Travel segment, offering discounted travel packages and hotel stays. Key revenue streams include local deals, Groupon Goods, and Groupon Getaways. Partnerships with local businesses, as well as marketing and promotional strategies to attract both merchants and consumers to its platform, significantly contribute to its earnings.

Groupon Financial Statement Overview

Summary

Groupon is experiencing financial difficulties with shrinking revenues and continuous losses, which are reflected in a weak balance sheet with high leverage. There are some positive signs, such as improvements in cash flow and EBITDA margins, but the overall financial health remains precarious.

Income Statement

Groupon's income statement shows a declining revenue trend, with a significant drop from $2.2 billion in 2019 to $492.6 million in 2024. Gross profit margin remained relatively stable, but the net profit margin is negative due to consecutive net losses. Revenue growth has been negative for several years, indicating a struggle to sustain top-line growth. EBITDA margin improvement in 2024 is a positive sign, albeit from a low base.

Balance Sheet

The balance sheet reveals high leverage with a debt-to-equity ratio that has increased due to declining equity, turning negative in 2023. The equity ratio is weak, reflecting financial instability. Despite some reduction in total debt, equity erosion poses a significant risk. The return on equity is negative, largely due to consistent net losses.

Cash Flow

Cash flow analysis shows an improvement in operating cash flow from negative to positive in 2024. Free cash flow has also turned positive, indicating better cash management. However, the historical volatility in free cash flow and operating cash flow to net income ratio suggests a need for sustained cash generation capability.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
492.56M	514.91M	599.09M	967.11M	1.42B
	Gross Profit
444.31M	450.66M	522.82M	737.12M	677.29M
	EBIT
8.79M	-18.25M	-47.75M	79.14M	116.25M
	EBITDA
9.04M	23.51M	-114.93M	178.05M	-173.35M
	Net Income Common Stockholders
-59.03M	-55.41M	-234.38M	118.67M	-286.56M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
228.84M	141.56M	281.28M	498.73M	850.59M
	Total Assets
612.69M	570.96M	793.12M	1.16B	1.41B
	Total Debt
252.93M	278.75M	309.23M	382.15M	520.42M
	Net Debt
24.09M	137.19M	27.95M	-116.58M	-330.17M
	Total Liabilities
571.64M	611.27M	784.26M	947.59M	1.30B
	Stockholders Equity
40.81M	-40.63M	8.47M	209.87M	107.67M
Cash Flow		Free Cash Flow
40.56M	-99.80M	-174.83M	-176.72M	-116.55M
	Operating Cash Flow
55.89M	-77.98M	-135.99M	-123.96M	-63.60M
	Investing Cash Flow
-6.81M	-1.40M	-38.84M	-45.81M	-20.12M
	Financing Cash Flow
47.79M	-35.69M	-34.41M	-183.85M	176.80M

Groupon Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 26.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GRPN, the sentiment is Positive. The current price of 26.48 is above the 20-day moving average (MA) of 21.17, above the 50-day MA of 18.70, and above the 200-day MA of 13.06, indicating a bullish trend. The MACD of 2.34 indicates Negative momentum. The RSI at 74.78 is Negative, neither overbought nor oversold. The STOCH value of 93.12 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GRPN.

Groupon Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EVER	81 Outperform	$867.40M	23.31	32.17%	―	113.43%	―
ANGI	69 Neutral	$803.78M	16.05	5.05%	―	-16.79%	―
SSTK	67 Neutral	$657.83M	17.19	7.07%	6.59%	10.30%	-57.87%
GRPN	60 Neutral	$1.05B	35.54	-90.27%	―	-5.76%	21.27%
Sector *	60 Neutral	$14.09B	6.90	-3.35%	3.68%	2.44%	-36.27%
SEAT	52 Neutral	$395.66M	25.25	-1.00%	―	0.82%	-102.72%
KIND	44 Neutral	$554.75M	―	-18.77%	―	12.01%	35.71%

Groupon Corporate Events

Groupon CEO to Discuss Strategy at Fireside Chat

Groupon, Inc. is set to participate in the Northland Capital Markets Fireside Chat, where CEO Dusan Senkypl will discuss the company’s recent performance and future strategy. Despite facing risks such as global economic uncertainties and competition, Groupon remains focused on empowering customers with unique experiences at unbeatable value. With a presence in 14 countries and partnerships with over 50,000 merchants, Groupon aims for significant growth in billings, leveraging new revenue streams and geographic expansion.