Groupon Stock Analysis, Valuation (NASDAQ:GRPN)

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$4.34 $0.04 (0.91%) GRPN stock closing price Sep 19, 2017 (Closing)
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Groupon
Updated on : Sep 19, 2017
previous close
GRPN 4.3 (0%)
S&P 500 2506.7 (0%)
Closing Price On: Sep 19, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Internet Commerce
Sector :
Retail-Wholesale
5 Quarter Revenue
Revenue Growth
2017-Q2
$million
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
7.7%
Operating Profit
Operating Margin:
-1.3%
Sector Average:
5.6%
5 Quarter Net Profit
Net Margins
2017-Q2
%
LTM Margin
Debt/Equity Ratio
Debt:
184.2M
Debt/Equity Ratio:
 0.99
Compared to the industry
Cash Flow
Operating cash flow:
-$21.8M
Net Income:
-$9.3M
PROS      CONS
Recent Growth
Long Term Growth
Operating Margins
Net Margins
High Debt Burden
ROE
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
PE: N/A
GRPN PS :
0.8
Industry PS :
0.7
Sector:   Retail-Wholesale.   *PE adjusted for one time items.
Other Metrics
Return on Equity:
-45.6%
Free Cash Flow Margin:
-5.6%
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Groupon Analysis Video

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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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Groupon Inc Stock Rating (1.4/5)

Our Groupon stock opinion is based on fundamentals of the company. This Groupon stock analysis is based on latest 2017 Q2 earnings. The stock price analysis takes into account the company's valuation metrics.

Should you buy GRPN stock?

Should you sell GRPN stock?

  • Groupon sales shrank by -12.4% year-over-year in 2017 Q2.
  • Over the last 5 years, the company registered a poor revenue growth of 7.7%.
  • Groupon registered a negative operating margin of -1.3% (average) over the Trailing Twelve Months (TTM).
  • Over the last 12 months, Groupon had an average Net loss of -4.2%.
  • With a debt/equity ratio of  0.99, Groupon is highly leveraged in comparison to Retail-Wholesale peers.
  • The lack of profits renders the PE ratio useless for GRPN stock.
  • Groupon has a negative ROE (Return On Equity) of -45.6%, indicating the company is not profitable.
  • The company has a negative free cash flow margin of -5.6%.

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.