Is Now The Time To Consider Groupon, Inc. (NASDAQ:GRPN)?

Groupon, Inc. (NASDAQ:GRPN) has been a mainstay in the daily deals market since its inception, but its recent performance has raised questions about its investment potential. As an investor who values stability, predictability, and consistent growth, I have been closely monitoring Groupon's progress and its potential as a long-term investment opportunity.

Groupon's market share and customer base have evolved significantly over the past five years. In 2019, the company had approximately 50 million active customers, but by 2023, this number had decreased to around 35 million. However, Groupon's revenue has remained relatively stable, hovering around $1.5 billion annually. The company's focus on local, experiential, and travel deals has helped maintain its relevance in a changing market. Looking ahead, Groupon projects a 5% increase in active customers by 2025, driven by its expansion into new markets and product offerings.



Groupon's management team has been implementing strategic changes to stabilize the company's performance. In Q3 2023, the company reported a net loss of $59.7 million, a 17.5% decrease from Q3 2022. Revenue grew by 6% YoY, driven by increases in active customers and average order value (AOV). Over the past five years, stock performance has been volatile, with a 5-year CAGR of -10.6%.



Groupon faces key risks such as intense competition and evolving consumer behavior. However, the company has been addressing these challenges through diversifying its business model, focusing on local experiences, and strategic partnerships. Groupon's Q3 2023 results showed a 17% increase in active customers, indicating a shift towards a more customer-centric approach. Additionally, the company's ESG initiatives, including waste reduction and sustainability, could enhance its long-term appeal to socially conscious investors.

Groupon's current valuation, with a P/E ratio of 14.68, is below its 5-year average of 20.75 and that of its industry peers. This suggests a potential undervaluation. However, Groupon's growth has been inconsistent, with Q3 2023 revenue showing a 12% decrease YoY. The author's preference for stable, predictable growth may raise concerns. Yet, Groupon's recent strategic shift towards local commerce and experiences could signal a turnaround. Monitoring this transition and assessing its impact on earnings will be crucial before making an investment decision.

In conclusion, Groupon's recent performance has been mixed, with a decrease in active customers and volatile stock performance. However, the company's strategic focus on local commerce and expansion into new markets could drive long-term growth. As an investor, I would recommend closely monitoring Groupon's progress and reassessing its investment potential as it continues to navigate the competitive daily deals market.