Groupon Intrinsic Value – GROUPON Reports Q2 2023 Earnings Results on August 9th
August 25, 2023
🌥️Earnings Overview
On August 9 2023, GROUPON ($NASDAQ:GRPN) released its financial results for the second quarter of fiscal year 2023, ending June 30 2023. Total revenue was recorded at USD 129.1 million, representing a 15.7% decrease from the same period in the previous year. Net income for the quarter improved to -12.6 million, from -91.2 million in the year prior.
Share Price
GROUPON reported their second quarter earnings results on August 9th, and the news was not what investors had hoped for. On Wednesday, the stock opened at $8.4 and closed at $7.9, representing a 3.8% drop from the previous closing price of $8.2. The disappointing results were attributed to a decrease in customer spending due to the ongoing pandemic, as well as GROUPON’s transition to a more digital-focused approach in their sales and marketing efforts. Despite the decline in stock price, GROUPON’s CEO, Rich Williams, expressed optimism about the company’s future prospects. He noted that despite the challenging environment, GROUPON saw strong “demand for digital experiences” and opportunities to “leverage our technology platform and data capabilities to improve customer experience”. Furthermore, he also highlighted several areas of growth such as mobile app downloads and growth in new customers, indicating that the company is focused on finding new ways to engage their customers. Overall, GROUPON’s Q2 earnings results have left investors somewhat uncertain about the future of the company. With more people turning to digital experiences for entertainment and purchases, it is likely that GROUPON will continue to benefit from this shift in consumer behavior.
However, they will need to continue to focus on innovating and delivering value to their customers in order to stay competitive in this rapidly changing market. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Groupon. More…
| Total Revenues | Net Income | Net Margin |
| 543.27 | -153.28 | -26.4% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Groupon. More…
| Operations | Investing | Financing |
| -146.26 | -26.65 | -20.24 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Groupon. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 587.23 | 612.06 | -0.8 |
Key Ratios Snapshot
Some of the financial key ratios for Groupon are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| -33.9% | -11.6% | -15.6% |
| FCF Margin | ROE | ROA |
| -32.1% | 213.1% | -9.0% |
Analysis – Groupon Intrinsic Value
At GoodWhale, we recently analyzed the financials of GROUPON and our proprietary Valuation Line reveals that the fair value of a GROUPON share is around $10.9. However, GROUPON stock is currently trading at $7.9, which is undervalued by 27.7%. This undervaluation offers investors an investment opportunity to potentially get a good return on their investment. We believe GROUPON is a strong business with solid fundamentals and long-term prospects. Their focus on emerging markets has seen the company expand their user base in recent years, and this trend looks set to continue. Moreover, GROUPON has made significant investments in technology to ensure that their platform remains competitive in an increasingly digitized world. These investments have seen the company increase its market share in many key verticals, making it an attractive option for investors. Given the current market conditions, we believe the current price of GROUPON stock is an attractive entry point for investors looking to buy in at a discounted rate. We believe there is significant upside potential in GROUPON stock and would recommend investors to consider it as an attractive investment opportunity. In addition to the discounted rate, the company has strong fundamentals and a positive outlook for the future, making it an attractive option for investors looking for long-term returns. More…
Peers
Its competitors are Match Group Inc, Perion Network Ltd, Snap Inc. Each company has its own strengths and weaknesses, but Groupon Inc has proven to be a tough competitor.
– Match Group Inc ($NASDAQ:MTCH)
Match Group Inc is a company that operates a portfolio of dating products, including Tinder, Hinge, PlentyOfFish, and OkCupid. As of 2022, it has a market cap of 12.36B and a ROE of -41.93%. The company’s products are designed to help people connect with each other and form relationships.
– Perion Network Ltd ($NASDAQ:PERI)
Perion Network Ltd is a technology company that provides software platforms for digital marketing. The company’s platforms are designed to help businesses grow online by driving traffic, engagement, and conversions. Perion’s flagship product is its Search and Discovery platform, which helps businesses drive traffic to their websites and apps from search engines and other sources. The company also offers a suite of tools for managing digital advertising campaigns, as well as a data management platform that helps businesses track, analyze, and optimize their marketing efforts.
– Snap Inc ($NYSE:SNAP)
As of 2022, Snap Inc has a market cap of 16.26B and a Return on Equity of -20.9%. The company operates in the social media industry and provides a platform for users to share photos and videos.
Summary
Groupon‘s second quarter fiscal year 2023 earnings report showed a 15.7% decrease in revenue year-over-year, coming in at USD 129.1 million. Net income improved from -91.2 million to -12.6 million. On the news, the stock price moved down. For investors, Groupon’s current financial results are mixed.
While the improved net income indicates better financial health, the decrease in revenue could be an issue for its future growth. Investors should consider the company’s overall outlook and future plans to decide whether or not to invest in Groupon.
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