Groupon Stock Analysis, Valuation (NASDAQ:GRPN)
Groupon Analysis Video
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.
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 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%.
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.