Let’s explore why investing in Groupon (GRPN) stock might be an interesting consideration:
- Recent Analyst Coverage:
- Roth MKM initiated coverage on Groupon with a buy rating and a price target of $301.
- This represents a nearly 200% upside from where the stock closed recently.
- The research firm believes that the pandemic and reopening impacted Groupon’s sales and profits. However, with consumer spending slowing down and inflation affecting lower-income Americans, demand for Groupon’s services could rise.
- The company’s operational leverage (relatively low variable costs) may lead to solid profit growth.
- Historical Context:
- Customers and investors have somewhat forgotten Groupon over the last decade.
- However, the platform gained prominence during the 2008-09 recession when consumers sought deals, and merchants aimed to drive traffic.
- While the buzz faded over time, Groupon stock has recently started to recover, showing a 73% increase over the last year.
- If revenue continues to improve, the stock could have significant room for growth.
- Valuation Metrics:
- Valuation metrics suggest that Groupon may be fairly valued.
- Its Value Score of C indicates it’s a neutral pick for value investors2.
- Potential Buyout Attraction:
- Groupon boasts attractive assets, including a high revenue base, a sophisticated online marketing platform, and a large mobile footprint with nearly 140 million downloads3.
- These features could make it appealing to potential suitors.
Through the company-wide implementation of AI, Groupon has enhanced deal copywriting and the process of creating deals. Groupon is also using AI in product and engineering initiatives to enhance deal recommendations and quality control, among other things. Groupon enterprise accounts are once again growing year over year.
Investing in individual stocks carries risks, and it’s essential to conduct thorough research and consider your financial goals before making any investment decisions.
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