Groupon Stock Analysis, Valuation (NASDAQ:GRPN)

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$4.67 $0.03 (0.65%) GRPN stock closing price May 24, 2018 (Closing)
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Groupon
Updated on : May 24, 2018
previous close
GRPN 4.7 (0%)
S&P 500 2727.8 (0%)
Closing Price On: May 24, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Internet Commerce
Sector :
Retail-Wholesale
5 Quarter Revenue
Revenue Growth
2018-Q1
$million
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
3.3%
Operating Profit
Operating Margin:
1.6%
Sector Average:
5.4%
5 Quarter Net Profit
Net Margins
2018-Q1
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
192.6M
Debt/Equity Ratio:
 0.55
Compared to the industry
Cash Flow
Operating cash flow:
-$119.8M
Net Income:
-$6.9M
PROS      CONS
Recent Growth
Long Term Growth
Operating Margins
Net Margins
High Debt Burden
FCF Margin
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
GRPN PS :
0.9
Industry PS :
0.8
Sector:   Retail-Wholesale.   *PE adjusted for one time items.
Other Metrics
Return on Equity:
13.3%
Free Cash Flow Margin:
-22.3%
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Groupon Stock Analysis

5690 6 2

Groupon stock analysis must look at the comprehensive business model of the firm. The firm which was once marked as the fastest growing company has shown few positive signs for investors recently. Groupon valuation peaked at over $13 billion after it was listed for $20 However since then the stock has lost over two-third value as can be seen from Groupon stock price history. The loss of faith by the investors has been due to consensus that the current business model cannot be sustained for long.

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Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock.

Groupon Inc Stock Rating 1.7/5

Should you buy GRPN stock?

Should you sell GRPN stock?

  • Groupon sales shrank by -7% year-over-year in 2018 Q1.
  • Revenue growth of 3.3% has been weak over the last 5 years.
  • Groupon's TTM operating margin of 1.6% was rather poor.
  • Groupon's Net margins were poor at 1.1% in the last twelve months.
  • Groupon is debt laden and has a high debt/equity ratio of  0.55.
  • The GRPN stock currently trades at a PE of 233.5, which is expensive, compared to the industry average of 20.9.
  • Groupon has a negative FCF (Free Cash Flow) margin of -22.3%.

Comments on this video and Groupon stock

Groupon started by giving deals of the day to its customers. This was a great way to get a bargain for the end customers and for the business owners to give bulk discount and get additional advertising. However it led to several issues like the business owners not being able to cater to excess demand and lower quality of products. Groupon performance in the market has also been hit by the fact that it has still not shown profitability to the investors. Many other similar business models have fallen in the dust and none of them have shown a sustainable working model. Groupon revenue and Groupon assets have not increased significantly either.