Groupon (GRPN) earnings: is Vouchercloud the hope for the company?

1:46 pm ET, 01 Aug 2018

Groupon, Inc. (GRPN) is expected to report earnings on August 3 before market open. The report will be for the fiscal quarter ending June 2018. Shares are trading at 4.81, down -0.62%.

What are GRPN earnings expectations?  What news should investors be paying attention to?

Groupon reported better-than-expected first-quarter results, as last year’s restructuring is bearing fruit. While streamlining the operation is helping Groupon expand margins, the firm is continuing to increase marketing as a percentage of revenue. It has done so since 2015.  Analysts speculate this is because of its lack of network effect and low switching costs, which forces Groupon to continue to increase its marketing spending.  

Management upped its full-year guidance due to the strong first-quarter numbers and the accretive acquisition of Vouchercloud in April. The stock barely moved in reaction to the first-quarter numbers, which is concerning to many prospective investors.

Groupon, Inc. has a mixed history of beating analysts’ earnings estimates.  In the past four quarters, the company: 

  • Beat analyst EPS estimates by 2 cents ($.02 actuals vs. $0 forecast) in FQ2’17;
  • Delivered on the analyst EPS estimate ($.01 actuals vs. $.01 forecast) in FQ3’17;
  • Missed analyst EPS estimates by 2 cents ($.07 actuals vs. $.09 forecast) in FQ4’17;
  • Beat analyst EPS estimates by 3 cents ($.03 actuals vs. $0 forecast) in FQ1’18.

For FQ2’18, EPS is expected to grow by 50% year-over-year to $.03, while revenue is expected to decline 5% year-over-year to $631 million.  


Over the last month, Groupon, Inc. (GRPN) returned +11.86%.

Groupon, Inc. (GRPN) forward P/E ratio is 17.3, and it’s low compared to its industry peers’ P/E ratio.

Groupon, Inc. (GRPN) short share of float is 11.54%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock.

Groupon, Inc. (GRPN) average analyst price target ($5.54) is 15.18% above its current price ($4.81).

For the latest price and information on Groupon, Inc., please visit Finstead and search for "GRPN price" or "GRPN news".

Groupon, Inc. (GRPN) Stock Guide

Updated at: 11:05 pm ET, 17 Sep 2020

Before we start: if you're looking for GRPN stock price, you can quickly find it out by visiting Finny and typing "GRPN quote". If you're looking for a quick scoop on GRPN stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "GRPN". You'll get all this info in one place. Or you can just type "GRPN news" to get the latest stock news.

Looking to buy or sell Groupon, Inc. (GRPN)? Interested in getting the full scoop on GRPN, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this GRPN stock guide, we'll address key questions about GRPN, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are GRPN earnings?
2. What is GRPN stock forecast (i.e., prediction)?
3. GRPN buy or sell? What is GRPN Finny Score?
4. What are the reasons to buy GRPN? Why should I buy GRPN stock?
5. What are the reasons to sell GRPN? Why should I sell GRPN stock?
6. What are GRPN key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are GRPN earnings?

GRPN trailing 12-month earnings per share (EPS) is -$7.94.

Analyst Predictions

2. What is GRPN stock forecast (i.e., prediction)?

Based on GRPN analyst price targets, GRPN stock forecast is $26.59 (for a year from now). That means the average analyst price target for GRPN stock is $26.59. The prediction is based on 18 analyst estimates.

The low price target for GRPN is $17.30, while the high price target is $36.00.

GRPN analyst rating is Hold.

Analysis

3. GRPN buy or sell? What is GRPN Finny Score?

#{finnyScore:57}Our quantitative analysis shows 4 reasons to buy and 3 reasons to sell GRPN, resulting in Finny Score of 57.

4. What are the reasons to buy GRPN? Why should I buy GRPN stock?

Here are the reasons to buy GRPN stock:

  • Groupon should maintain its first-mover advantage as it leverages its current relationships with local merchants to provide more attractive offerings for consumers.
  • Groupon CEO’s background in marketing at Amazon could help the firm compete effectively with all direct sales competitors, including Amazon.
  • As more local businesses become more tech-savvy, they may need less hand-holding by Groupon’s salesforce, which could potentially lead to lower costs for Groupon.
  • Groupon is trying to change the consumer perception of its brand as it transitions from a deals company to a marketplace company. For this, the company has outlined a new restructuring plan with focus on three key areas namely, marketing, international and shopping. The company now operates in 15 countries across the globe, down from 47 countries that it operated in the beginning of 2015.
  • As a part of its growth initiatives, Groupon is also forming strategic partnerships to expand its business. In Apr 2016, Groupon joined forces with Comcast Corporation and received a $250 million investment from the cable giant through its private investment firm, Atairos Management. This new partnership has opened up avenues for Groupon to advance its local business through Comcast's impressive subscriber and advertiser network.
  • As a part of its growth initiatives, Groupon is also forming strategic partnerships to expand its business. In April 2016, Groupon joined forces with Comcast Corporation and received a $250 million investment from the cable giant through its private investment firm, Atairos Management. This new partnership has opened up avenues for Groupon to advance its local business through Comcast's impressive subscriber and advertiser network.
  • We believe that growth in local billings in North America region will bolster Groupon’s top-line growth. In the reported quarter, local billings improved 2.5% year-over-year in North America. We believe that strong growth in mobile, new user additions, continuing investments in POS and payment technologies, focus on the pull marketplace and innovation in the push business through introduction of new technology will help Groupon to achieve billings growth in future.
  • Groupon’s policy of launching new products on a regular basis is a positive. The company’s strategy of offering special deals prior to important events, like Thanksgiving, enhances its popularity. In August 2015, Groupon launched Groupon To Go, in order to enter the food delivery business.
  • The company, through its e-Commerce platform, offers numerous deals that can be accessed by users anywhere and at anytime. Users who search for these live deals generally tend to spend more. The company continues to invest in the platform to attract new merchants, which will drive popularity.
  • GRPN profitability is improving. The YoY profit margin change was 6.68 percentage points. See GRPN profitability chart.
  • GRPN Price/Sales ratio is 0.49, which is low compared to its industry peers’ P/S ratios. See GRPN forward Price/Sales ratio chart.
  • GRPN cash to debt ratio is 1.40, higher than the average industry (0.17) and sector (0.17) cash to debt ratio. See GRPN cash to debt chart.
  • GRPN Enterprise Value/Revenue multiple is 0.37, which is low compared to its industry peers’ Enterprise Value/Revenue multiples. See GRPN Enterprise Value/Revenue chart.

5. What are the reasons to sell GRPN? Why should I sell GRPN stock?

Let's look at the reasons to sell GRPN stock (i.e., the bear case):

  • Groupon has needed to continuously spend to acquire customers and build relationships with merchants, and such spending may limit Groupon’s profitability.
  • If merchants become disenfranchised with its daily deals, they may either flock to Groupon’s competitors or push back against Groupon’s high take rate.
  • Operating leverage, if any, is only for the short-term as Groupon will have to keep spending more to acquire new customers in order to increase transactions per and ROI for the merchant.
  • Groupon’s business model makes it heavily dependent on daily deals, which is a major headwind. Since most of the offerings are consumer discretionary products, demand is heavily dependent on macroeconomic conditions. As redemptions are high and unused Groupons are low (revenues recognized upfront in daily deals, so an unused Groupon boosts the company’s revenues), the transition is expected to negatively impact the top line in the near term.
  • Moreover, Groupon needs to continue spending on generating awareness about its offerings, which will drive up costs. Further, the company is likely to incur sizeable expenses owing to the ongoing restructuring activities, which can weigh down on its profitability. Additionally, aggressive investments for mobile, infrastructure and product development will continue to drive operating expenses higher.
  • Despite growing billings, Groupon is yet to earn significant profits since its inception. Moreover, revenue growth has slowed down in the last couple of years. Furthermore, the new restructuring plan directly contradicts the company’s earlier business model per which itundertook rapid international expansion at the cost of profits.
  • Intensifying competition remains a major headwind, which is also likely to hurt profitability. The company expects competition in eCommerce generally, and group buying in particular, to continue to increase. In addition, increasing presence of the social media companies in the e-commerce space can also pose serious challenges to Groupon’s recovery as merchants are increasingly adopting these platforms to sell their products.
  • GRPN quarterly revenue growth was -25.70%, lower than the industry and sector average revenue growth (1.28% and 0.89%, respectively). See GRPN revenue growth chart.
  • GRPN forward P/E ratio is 47.06, which is high compared to its industry peers’ P/E ratios. See GRPN forward P/E ratio chart.
  • GRPN short share of float is 17.63%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock. See GRPN short share of float chart.

Key Stats

6. What are GRPN key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for GRPN:

Metrics GRPN
Price $23.39
Average Price Target / Upside $26.59 / 13.68%
Average Analyst Rating Hold
Forward Dividend Yield 0.00%
Industry Internet Content & Information
Sector Technology
Number of Employees 6,576
Market Cap $919.46M
Forward P/E Ratio 47.06
Price/Book Ratio 0.49
Revenue (TTM) $1.88B
YoY Quarterly Revenue Growth -25.70%
Profit Margin -12.00%

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