Q4 Miss for Groupon, but We Continue to Expect a Turnaround in 2022; Maintaining $53 FVE

Groupon reported fourth-quarter results that missed FactSet consensus estimates on the top and bottom lined mainly because of the omicron variant. Continuing recovery from the pandemic drove double-digit local and travel revenue growth, which we think bodes well for Groupon this year as more consumers and merchants could join the marketplace. However, without a network effect moat source, Groupon still must aggressively market to consumers and provide features such as no restrictions to merchants to strengthen the supply/demand side of its platform. We did not make any significant changes to our model and are maintaining our $53 fair value estimate. This very-high-uncertainty name continues to trade at a significant discount to our fair value estimate.