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Groupon Inc (GRPN)
NASDAQ:GRPN

Groupon (GRPN) AI Stock Analysis

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GR

Groupon

(NASDAQ:GRPN)

Rating:52Neutral
Price Target:
$33.00
▲(1.20%Upside)
Groupon's overall stock score is primarily influenced by its financial struggles, characterized by declining revenue and high debt levels. Positive earnings call insights and strong market momentum provide some optimism, but poor valuation metrics limit the stock's attractiveness.
Positive Factors
Business Transformation
The company is showing solid progress as it continues its major transformation from its old legacy business.
Financial Performance
Billings and Adj. EBITDA exceeded the high-end of the guide in Q1, led by North America Local Billings accelerating to +11% YoY, the first quarter of double-digit growth in the business since 2017.
Negative Factors
Consumer Spending Volatility
There is mounting risk of volatility in discretionary consumer spending, which could impact demand for local services more broadly.
Risk-Reward Ratio
The recent sharp increase in the share price, with GRPN now trading at 13x NTM Street Adj. EBITDA, is negatively impacting the risk-reward ratio.

Groupon (GRPN) vs. SPDR S&P 500 ETF (SPY)

Groupon Business Overview & Revenue Model

Company DescriptionGroupon, Inc., together with its subsidiaries, operates a marketplace that connects consumers to merchants. It operates in two segments, North America and International. The company sells goods or services on behalf of third-party merchants; and first-party goods inventory. It serves customers through its mobile applications and websites. The company was formerly known as ThePoint.com, Inc. and changed its name to Groupon, Inc. in October 2008. Groupon, Inc. was incorporated in 2008 and is headquartered in Chicago, Illinois.
How the Company Makes MoneyGroupon makes money primarily through the sale of vouchers and deals that offer discounts on local services, goods, and travel. The company generates revenue by taking a commission on each deal sold, which is a percentage of the price paid by the consumer. Additionally, Groupon earns money through its Goods segment, where it sells merchandise directly to consumers, and the Travel segment, offering discounted travel packages and hotel stays. Key revenue streams include local deals, Groupon Goods, and Groupon Getaways. Partnerships with local businesses, as well as marketing and promotional strategies to attract both merchants and consumers to its platform, significantly contribute to its earnings.

Groupon Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 92.05%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong start to the year with exceeded guidance and significant growth in billings, especially in North America and international markets like Spain. Leadership changes and raised guidance demonstrate confidence, but challenges remain with revenue lagging due to strategic take rate adjustments and slow progress in app conversion.
Q1-2025 Updates
Positive Updates
Exceeding Guidance and Growth in Billings
Q1 results exceeded guidance on billings and adjusted EBITDA, with global billings growing 1.4% year-over-year. North America Local billings accelerated to 11% year-over-year growth, the first double-digit growth since 2017, excluding the pandemic recovery period.
Strong Performance in North America Local
Top 10 cities in North America saw double-digit growth in billings. The Things to Do segment grew billings double digits for the 5th straight quarter, significantly outpacing current industry trends.
Impressive International Growth
International local business (excluding Italy) showed a 5% year-over-year billings growth. Spain led the international markets with strong double-digit growth, showcasing the success of the transformation strategy.
Strategic Leadership and Team Strengthening
Key appointments were made with Josef Buryan as Chief Marketing Officer, Ales Drabek as Chief Technology Officer, Barbara Weisz as Chief Revenue Officer, Filip Popovic as Chief Commercial Officer, and Marie Havlickova as Chief Product Officer.
Raised Guidance for Core Business
Despite the sale of the Giftcloud subsidiary, which removed $6 million in revenue and $4 million in adjusted EBITDA, the company raised its guidance for the core business, demonstrating confidence in their operations.
Negative Updates
Revenue Lagging Due to Take Rate Compression
Progress in revenue is lagging billings due to the deliberate compression of take rates in North America Local, a consequence of focusing on building a sustainable foundation for long-term growth.
Challenges in Mobile Application Conversion
Slow progress in transitioning to the MobileNext application, with some legacy customers struggling with the new interface.
Company Guidance
During the call, Groupon provided guidance indicating a positive outlook for 2025, with billings and adjusted EBITDA exceeding expectations in the first quarter. The company reported a year-over-year global billings growth of 1.4%, driven by an 11% increase in North America Local billings. Additionally, the Things to Do vertical experienced double-digit growth for the fifth consecutive quarter. Internationally, excluding Italy, billings grew by approximately 5%. Despite a compression in take rates affecting revenue growth, Groupon raised its full-year billings growth guidance from 2%-4% to 3%-5%, while maintaining revenue and adjusted EBITDA guidance, even after the $6 million revenue and $4 million adjusted EBITDA impact from the sale of Giftcloud. The leadership team has been strengthened with key appointments, and the company is committed to a strategy focused on marketplace health, platform modernization, and financial strength, positioning itself for long-term sustainable growth.

Groupon Financial Statement Overview

Summary
Groupon is facing significant financial challenges with declining revenue and persistent net losses. High debt levels and low equity increase financial risk, although recent cash flow improvements offer some optimism.
Income Statement
45
Neutral
Groupon's revenue has been declining with a notable drop from $967 million in 2021 to $486 million TTM. The company has been struggling with profitability, evidenced by negative net income margins consistently over the years, reaching -8.13% TTM. Gross profit margins remain strong at 90.4% TTM, but significant EBIT and EBITDA margin declines reflect operational challenges.
Balance Sheet
30
Negative
The balance sheet shows high leverage with a debt-to-equity ratio of 5.49 TTM, indicating significant financial risk. Stockholders' equity is low, though the equity ratio improved slightly to 7.48% TTM. The company has been reducing total assets and liabilities, but equity remains weak, suggesting vulnerability to financial instability.
Cash Flow
50
Neutral
Groupon's cash flow from operations improved to $65.98 million TTM from previous negative figures. Free cash flow has seen positive growth, reaching $50.37 million TTM, indicating better cash management. However, fluctuations in cash flow figures and past negative free cash flows highlight potential volatility.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
486.66M492.56M514.91M599.09M967.11M1.42B
Gross Profit
440.05M444.31M450.66M522.82M737.12M677.29M
EBIT
3.31M8.79M-18.25M-47.75M79.14M116.25M
EBITDA
1.58M9.04M23.51M-114.93M178.05M-173.35M
Net Income Common Stockholders
-39.58M-59.03M-55.41M-234.38M118.67M-286.56M
Balance SheetCash, Cash Equivalents and Short-Term Investments
666.87M228.84M141.56M281.28M498.73M850.59M
Total Assets
1.28B612.69M570.96M793.12M1.16B1.41B
Total Debt
514.38M252.93M278.75M309.23M382.15M520.42M
Net Debt
-152.49M24.09M137.19M27.95M-116.58M-330.17M
Total Liabilities
1.09B571.64M611.27M784.26M947.59M1.30B
Stockholders Equity
191.20M40.81M-40.63M8.47M209.87M107.67M
Cash FlowFree Cash Flow
50.37M40.56M-99.80M-174.83M-176.72M-116.55M
Operating Cash Flow
65.98M55.89M-77.98M-135.99M-123.96M-63.60M
Investing Cash Flow
-6.62M-6.81M-1.40M-38.84M-45.81M-20.12M
Financing Cash Flow
11.99M47.79M-35.69M-34.41M-183.85M176.80M

Groupon Technical Analysis

Technical Analysis Sentiment
Positive
Last Price32.61
Price Trends
50DMA
22.91
Positive
100DMA
17.80
Positive
200DMA
14.38
Positive
Market Momentum
MACD
2.95
Negative
RSI
72.98
Negative
STOCH
79.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GRPN, the sentiment is Positive. The current price of 32.61 is above the 20-day moving average (MA) of 28.92, above the 50-day MA of 22.91, and above the 200-day MA of 14.38, indicating a bullish trend. The MACD of 2.95 indicates Negative momentum. The RSI at 72.98 is Negative, neither overbought nor oversold. The STOCH value of 79.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GRPN.

Groupon Risk Analysis

Groupon disclosed 45 risk factors in its most recent earnings report. Groupon reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Groupon Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$917.29M25.1932.17%113.43%
70
Outperform
$621.17M16.237.07%6.92%10.30%-57.87%
68
Neutral
$791.30M15.945.05%-16.79%
61
Neutral
$14.78B5.89-4.32%3.67%2.75%-30.30%
52
Neutral
$1.31B35.54-90.27%-5.76%21.27%
51
Neutral
$354.44M25.25-1.00%0.82%-102.72%
51
Neutral
$619.79M-18.77%12.01%35.71%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GRPN
Groupon
32.61
16.85
106.92%
ANGI
Angi
16.58
-4.12
-19.90%
SSTK
Shutterstock
18.99
-17.67
-48.20%
EVER
EverQuote
25.87
4.50
21.06%
SEAT
Vivid Seats
1.82
-3.58
-66.30%
KIND
Nextdoor Holdings
1.64
-0.82
-33.33%

Groupon Corporate Events

Business Operations and Strategy
Groupon CEO to Discuss Strategy at Fireside Chat
Positive
Dec 10, 2024

Groupon, Inc. is set to participate in the Northland Capital Markets Fireside Chat, where CEO Dusan Senkypl will discuss the company’s recent performance and future strategy. Despite facing risks such as global economic uncertainties and competition, Groupon remains focused on empowering customers with unique experiences at unbeatable value. With a presence in 14 countries and partnerships with over 50,000 merchants, Groupon aims for significant growth in billings, leveraging new revenue streams and geographic expansion.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.