Groupon shares decline 26% YTD, transitioning to marketplace platform, partnership expansion

From Nasdaq.: 2024-12-03 11:29:00

Groupon shares have declined 25.7% YTD, underperforming the Retail-Wholesale sector and industry peers like Booking Holdings, Amazon, and Travelzoo. The company’s underperformance is due to a decrease in North America and International revenues. However, Consolidated Travel revenues increased 3.4% year over year.

Groupon is transitioning from a deal company to a marketplace company, enhancing its platform with new features to improve customer experience. Efforts to increase customer value through personalization, AI-driven FAQ, and expanded market reach have driven customer interaction and retention. The company’s expanding partnerships with brands are also beneficial for investors.

For Q4 2024, Groupon expects revenues to decline 10-5% year over year, with adjusted EBITDA between $14-19 million. The Zacks Consensus Estimate for Q4 earnings indicates a 80% year-over-year decline. For 2024, revenues are expected to decline (6%)-(4%) year over year, with adjusted EBITDA between $65-70 million.

Groupon shares are trading at a premium with a forward P/E ratio of 58.8X. The company’s stretched valuation raises concerns for investors. Despite this, Groupon’s expanding product offering and market reach show promise. With a Zacks Rank #3 (Hold), investors are advised to wait for a better time to enter Groupon shares.



Read more at Nasdaq.: Groupon Shares Decline 26% YTD: How Should You Play the Stock?