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1. Company Snapshot

1.a. Company Description

Groupon, 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.

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1.b. Last Insights on GRPN

Recent negative drivers behind Groupon's stock performance include heightened uncertainty ahead of its upcoming Q4 and full-year 2024 financial results, scheduled for release on March 11, 2025. The company's lack of significant catalysts and uncertain growth prospects may be weighing on investor sentiment. Additionally, the absence of any significant positive news or developments in recent months has likely contributed to the stock's sluggish performance.

1.c. Company Highlights

2. Groupon's Q3 2025 Earnings: A Strong Recovery in Sight?

Groupon reported a loss per share of -$2.92, missing the estimated $0.01. Despite this, the company delivered an 11% year-over-year growth in global billings, with core local category billings up 18% and representing 89% of total billings. The adjusted EBITDA came in at $18 million, and trailing 12-month free cash flow was $60 million. The revenue growth was approximately 7.6% in Q2, and analysts estimate next year's revenue growth at 10.6%. The company's P/S Ratio stands at 1.34, indicating a relatively reasonable valuation given its growth prospects.

Publication Date: Nov -24

📋 Highlights
  • Global Billings Growth: Groupon's global billings increased 11% YoY in Q3 2025, with core local category billings up 18% and accounting for 89% of total billings.
  • Regional Performance: North America local billings grew 18%, while international local billings (excluding Giftcloud) rose 15%, driven by hyperlocal strategies.
  • Financial Metrics: Adjusted EBITDA reached $18 million, with trailing 12-month free cash flow at $60 million, reflecting strong cash generation.
  • Customer Growth: The company added 300,000 net new active customers QoQ and 1 million over four quarters, boosting user base engagement.
  • Technology & AI Investments: Groupon plans to invest in AI tools for sales, customer service, and marketing, with a new app driving 10-20% higher user engagement.

Operational Highlights

The company's hyperlocal focus is driving growth, with all 4 major international markets delivering double-digit growth and Chicago growing at nearly double the rate of North American local. Groupon added nearly 300,000 net new active customers quarter-over-quarter and 1 million+ over the last 4 quarters. The company's strategic priorities include accelerating top-line growth towards a goal of over 20% billings growth while generating strong adjusted EBITDA and free cash flow.

Leveraging AI for Growth

Groupon is leveraging AI in various areas, including sales, customer service, and marketing. AI tools will improve conversion rates for the sales team by providing better-quality leads and automating certain processes. In customer service, a chatbot has been introduced to handle initial communications, and AI-driven systems guide agents in their interactions with customers. On the marketing front, the company is measuring ROI across channels and has seen positive results, with a goal of achieving a 100% return within a 7-day window for all performance marketing budgets.

Platform Modernization and Travel Segment

The new app has shown 10-20% higher engagement among users, and the company plans to roll out the platform fully in early Q1 2026. In the travel segment, Groupon has seen success working with large enterprise brands, designing deals that fit their needs, and introducing more room nights and better deals. The company is also working to improve its website's compatibility with AI engines, allowing for easier incorporation of its results in natural language flows.

Valuation and Outlook

With a Free Cash Flow Yield of 9.03% and an ROIC of 9.05%, Groupon appears to be generating strong cash flows. However, the company's ROE is -726.27%, largely due to the EPS loss. The EV/EBITDA ratio stands at -11.9, indicating that the company's valuation is not overly aggressive given its growth prospects. As the company continues to invest in its platform and expand its AI capabilities, it is well-positioned to drive future growth.

3. NewsRoom

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Investors Purchase High Volume of Call Options on Groupon (NASDAQ:GRPN)

Nov -29

Source: defenseworld.net

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Groupon: Rising Auto Deliquincies Make GRPN Tempting

Nov -10

Source: seekingalpha.com

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Groupon, Inc. (GRPN) Q3 2025 Earnings Call Transcript

Nov -08

Source: seekingalpha.com

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Groupon Q3 Earnings Miss Estimates, Revenues Increase Y/Y

Nov -07

Source: zacks.com

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Here's What Key Metrics Tell Us About Groupon (GRPN) Q3 Earnings

Nov -07

Source: zacks.com

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Groupon (GRPN) Reports Q3 Loss, Tops Revenue Estimates

Nov -07

Source: zacks.com

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Groupon Reports Third Quarter 2025 Results

Nov -06

Source: newsfilecorp.com

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Groupon (GRPN) Registers a Bigger Fall Than the Market: Important Facts to Note

Oct -30

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.44%)

6. Segments

Local

Expected Growth: 4.5%

Groupon's Local segment growth of 4.5% is driven by increasing adoption of online booking and scheduling tools, expansion of services into new categories, and growth in higher-margin offerings such as experiences and events. Additionally, investments in marketing and sales efforts have contributed to increased customer acquisition and retention.

Service - Goods

Expected Growth: 3.8%

Groupon's 3.8% growth in Goods is driven by increasing online shopping adoption, expansion into new product categories, and improved logistics and supply chain management. Additionally, the company's focus on personalized marketing and loyalty programs has contributed to higher customer retention and repeat purchases.

Travel

Expected Growth: 4.2%

Groupon's Travel segment growth of 4.2% is driven by increasing consumer demand for experiences, expansion into new markets, and strategic partnerships with travel suppliers. Additionally, the company's focus on mobile optimization, personalized marketing, and loyalty programs has improved customer engagement and retention, contributing to the segment's growth.

7. Detailed Products

Local Deals

Discounted vouchers for local experiences, such as dining, spas, and activities

Goods

Discounted merchandise, including electronics, home goods, and apparel

Getaways

Discounted travel packages, including hotel stays and activities

Groupon+

Subscription-based service offering exclusive discounts and cashback rewards

Live Events

Discounted tickets to concerts, sports games, and other live events

8. Groupon, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Groupon's services can be substituted with other online deal platforms, but the company's strong brand recognition and large customer base mitigate this threat.

Bargaining Power Of Customers

Customers have a high bargaining power due to the availability of alternative online deal platforms and the low switching costs.

Bargaining Power Of Suppliers

Suppliers have a low bargaining power due to the large number of merchants and the company's ability to negotiate favorable terms.

Threat Of New Entrants

The threat of new entrants is moderate due to the relatively low barriers to entry, but the company's established brand and large customer base create a barrier to entry.

Intensity Of Rivalry

The online deal platform industry is highly competitive, with many players competing for market share, which increases the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 117.24%
Debt Cost 4.63%
Equity Weight -17.24%
Equity Cost 12.33%
WACC 3.30%
Leverage -680.19%

11. Quality Control: Groupon, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
comScore

A-Score: 3.9/10

Value: 7.8

Growth: 3.7

Quality: 2.9

Yield: 0.0

Momentum: 8.0

Volatility: 1.0

1-Year Total Return ->

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Groupon

A-Score: 3.9/10

Value: 5.1

Growth: 2.0

Quality: 4.4

Yield: 0.0

Momentum: 10.0

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
MediaAlpha

A-Score: 3.6/10

Value: 7.0

Growth: 4.7

Quality: 5.8

Yield: 0.0

Momentum: 1.0

Volatility: 3.0

1-Year Total Return ->

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BuzzFeed

A-Score: 3.3/10

Value: 8.3

Growth: 3.1

Quality: 4.8

Yield: 0.0

Momentum: 2.5

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
Vivid Seats

A-Score: 3.2/10

Value: 9.8

Growth: 3.9

Quality: 4.0

Yield: 0.0

Momentum: 0.0

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
TrueCar

A-Score: 2.9/10

Value: 8.4

Growth: 3.0

Quality: 4.5

Yield: 0.0

Momentum: 0.5

Volatility: 1.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

18.72$

Current Price

18.72$

Potential

-0.00%

Expected Cash-Flows