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Groupon Inc GRPN

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Groupon Beats Q2 Expectations; EBITDA Outlook Increased Due to One-Time Benefit; Maintaining FVE

Ali Mogharabi Senior Equity Analyst

Analyst Note

| Ali Mogharabi |

Groupon posted better-than-expected second-quarter results, as higher inventory, the return of many merchants, and enhancements to the app for consumers resulted in year-over-year and sequential growth in billings and revenue. On the bottom line, adjusted EBITDA benefited from unredeemed vouchers, leading management to increase 2021 adjusted EBITDA guidance, which remains slightly below our estimates. The stock declined 14%, as adjusted EBITDA outlook may have declined without the benefit. Groupon did not change its full-year revenue guidance. We think the market also reacted to the possibility that a pullback occurred in North America billings during recent months. In addition, the firm expects recovery in the international market to take a bit longer. The slowdown is likely short term. While some merchants remain hesitant to increase their offerings due to labor shortages and the delta variant of the coronavirus, consumer demand remains strong and the state of employment and labor in the U.S. is improving, as shown in July’s jobs report.

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Company Profile

Business Description

Groupon acts as the middleman between consumers and merchants, offering a variety of products and services at discounts via its online store. It offers consumers daily deals (in the form of online vouchers) from local merchants. Groupon also sells products directly to consumers. It generates revenue from the take rate on the purchase and/or usage of the vouchers (40% of total revenue) and from direct sales (60% of total revenue). More than 65% of Groupon’s revenue comes from North America.

600 West Chicago Avenue, Suite 400
Chicago, IL, 60654
T +1 312 334-1579
Sector Communication Services
Industry Internet Content & Information
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Slow Growth
Employees 4,159