Groupon Stock Analysis, Valuation (NASDAQ:GRPN)

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$4.66 $0.03 (0.64%) GRPN stock closing price Apr 25, 2018 (Closing)
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Groupon
Updated on : Apr 25, 2018
previous close
GRPN 4.7 (0%)
S&P 500 2639.4 (0%)
Closing Price On: Apr 25, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Internet Commerce
Sector :
Retail-Wholesale
5 Quarter Revenue
Revenue Growth
2017-Q4
$million
%
YOY GROWTH
Compared to the industry
Operating Profit
Operating Margin:
1%
Sector Average:
5.5%
5 Quarter Net Profit
Net Margins
2017-Q4
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
189.8M
Debt/Equity Ratio:
 0.75
Compared to the industry
Cash Flow
Operating cash flow:
$270.3M
Net Income:
$47.7M
PROS      CONS
Cash Flow
FCF Margin
Recent Growth
Operating Margins
Net Margins
High Debt Burden
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
GRPN PS : :
0.9
Industry PS : :
0.7
Other Metrics
Return on Equity:
6.4%
Free Cash Flow Margin:
29.2%
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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 2.4/5

Should you buy GRPN stock?

  • The operating cash flow looks good at 5.7 times the net income.
  • Groupon has a healthy FCF (Free Cash Flow) margin of 29.2%.

Should you sell GRPN stock?

  • Groupon sales declined by -6.6% year on year in 2017 Q4.
  • Groupon's TTM operating margin of 1% was rather poor.
  • Groupon posted a TTM Net margin of 0.5%.
  • Groupon has a debt/equity ratio of  0.75, which is worse than the average in the Retail-Wholesale sector.

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.