Groupon's 1Q17 in a 2Q17 Context

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Part 6
Groupon's 1Q17 in a 2Q17 Context PART 6 OF 6

Understanding Groupon’s Stock Trend

Stock trends

On June 14, Groupon (GRPN) stock yielded a return of 2.27% on a volume of 7.04 million and closed at $3.15. The company has generated investor returns of -7.89% in the trailing-one-month period and -0.32% in the trailing-12-month period. The company’s share price has gained 3.96% in the trailing-five-day period.

Understanding Groupon&#8217;s Stock Trend

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By comparison, Yelp (YELP), Alibaba (BABA) Amazon.com (AMZN), and eBay (EBAY), Groupon’s peer companies in the Internet sector, have generated returns of 6.45%, 13.57%, 1.57% and 1.26%, respectively, in the trailing-one-month period.

Price multiples

Groupon was trading at a forward EV-to-EBITDA (earnings before interest, tax, depreciation, and amortization) multiple of ~6.1x. By comparison, Yelp, Alibaba, Amazon, and eBay have EV-to-EBITDA multiples of ~13.9 x, ~22.20x, ~23.6x, and ~11.6x, respectively.

Groupon’s debt situation

Groupon has short-term debt of ~$28 million and long-term debt of ~$195 million, for a total debt of~$224 million. As the company has total capital of ~$435 million, its total-debt-to-total-capital ratio comes in at 46%.

The company’s debt-to-assets, debt-to-equity, and debt-to-EBITDA are now 0.15, 106.4, and 2.6, respectively, while its EBIT-to-interest ratio is -7.7x. The latter ratio, which is also referred to as the interest coverage ratio, provides a clue as to the company’s ability to pay interest on outstanding debt.

Notably, Groupon has a debt-to-enterprise value of 17%.


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