Groupon (NasdaqGS:GRPN) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Groupon, Inc. (NasdaqGS:GRPN) is scheduled to report Q3 earnings results after markets close for trading on November 5, 2020.

The company is expected to report earnings of -$0.68/share on revenue of $321.4 million. The consensus earnings per share (EPS) of -$0.68/share is based on a poll of 7 analysts and represents a decline in eps of −441.6% over the same quarter last year, when the company reported earnings of $0.20/share.

The revenue forecast of $321.4 million based on a poll of 7 analysts implies a year-over-year (YoY) decline in revenue of −35.2%. Last year the company reported $495.6 million in revenue for the quarter.

Expected to report EPS of -$0.68/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $321.39 $495.61 −35.2%
EPS -$0.68 $0.20 −441.6%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, and missed expectations 4 quarters.

What are your expectations from Groupon, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$2.64 -$0.93 64.7% Beat
Q1, 2020 -$2.16 -$1.63 24.6% Beat
Q4, 2019 $3.05 $1.40 −54.1% Missed
Q3, 2019 $0.48 $0.20 −58.1% Missed
Q2, 2019 $0.41 $0.20 −50.8% Missed
Q1, 2019 $0.08 $0.60 633.5% Beat
Q4, 2018 $2.54 $2 −21.2% Missed
Q3, 2018 $0.51 $0.80 57.6% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 55.8%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $16.54 $25.77 55.8% Increase
June 16, 2020 $24.17 $21.52 −11.0% Decline
February 18, 2020 $56.60 $34 −39.9% Decline
November 4, 2019 $57.40 $60 4.5% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.96, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.96 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Groupon, Inc. is currently trading at $19.39/share, down −6.8% for the day. The company is trading at approximately 30.7% of its 52-week high of $63.20/share. The company’s stock price is down −24.8% since the last earnings report and down −5.1% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 37.73 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:GRPN Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −2.46 and a forward P/E multiple of −6.84.

Groupon, Inc.’s current share price also implies a price-to-book (P/B) multiple of 4.73. The following table summarizes some other key fundamental ratios:

Data as of November 1, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $19.39
P/E Ratio −2.5x
P/E Ratio (Fwd) −6.8x
PEG Ratio 0.0
Total Debt / Total Capital 48.4%
Levered Free Cash Flow $12.605 million
EV / EBITDA −34.1x

Finbox

Groupon, Inc. is a small-cap stock with a market capitalization of $557.1 million and a total enterprise value of $333.7 million. The company operates in the Consumer Discretionary sector and the Internet & Direct Marketing Retail industry.

Groupon, Inc. operates online local commerce marketplaces that connect merchants to consumers by offering goods and services at a discount in North America and internationally. The company provides deals in various categories, including events and activities; health, beauty, and wellness; food and drink; home and garden; automotive; discounted and market rates for hotel, airfare, and package deals, as well as deals on various product lines, such as electronics, sporting goods, jewelry, toys, household items, and apparel. It offers its deal offerings to customers through Websites; search engines; mobile applications and mobile, which enable consumers to browse, purchase, manage, and redeem deals on their mobile devices; emails and push notifications; affiliate channels; social and display advertising; and offline marketing. The company was formerly known as ThePoint.com, Inc. and changed its name to Groupon, Inc. in October 2008. Groupon, Inc. was founded in 2008 and is headquartered in Chicago, Illinois.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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