Fast Facts: Groupon’s Fundamental Analysis



Deciphering Groupon’s comprehensive valuation

Groupon (GRPN) has an EV (enterprise value) of ~$1.7 billion. Peer companies Square (SQ), JD.com (JD), eBay (EBAY), and PayPal (PYPL) have EVs of ~$7.9 billion, ~$54.9 billion, ~$39.7 billion, and ~$54.5 billion, respectively.

Groupon’s EV-to-adjusted EBITDA (enterprise value to adjusted earnings before interested, tax, depreciation, and amortization) for the trailing 12 months is 19.3x. The EV-to-estimated EBITDA is 7.84x.

The EV-to-sales for the trailing 12 months is 0.55 x, while EV-to-sales expected next year is 0.56x.

Groupon’s trailing-12-month EV-to-cash inflow and trailing 12 months EV-to-free cash inflow are 19.7x and 81.1x, respectively.

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Earnings and sales

The company reported EPS (earnings per share) of -$0.34, while EPS for the current period is forecast at ~$0.10.

The EPS for last year came on total sales of $3.1 billion, which fell 1% annually. Sales for this year are expected to expand ~$2.9 billion and then to ~$3.02 billion next year.

Inside Groupon’s price metrics

With a book value per share of ~$0.37, Groupon is trading at a price-to-book value of 10.3x. The estimated book value per share for the stock is ~$0.39.

The price-to-sales ratio is 0.70x, while the estimated price-to-sales is 0.74x.

A look at Groupon’s debt position

Groupon’s balance sheet reflects short-term debt and long-term debt of $28 million and $195 million, respectively. Those numbers put its total debt at $224 million. The company reported total capital of $435 million, so if you work out its total debt-to-total capital ratio, you come to 51%.

The company’s debt-to-assets, debt-to-equity, and debt-to-EBITDA work out to 0.15, 106.43, and 2.56, respectively. Delving deeper into the company’s debt ratios, you see that Groupon has an EBIT on interest ratio of -7.71x. This ratio provides a clue to the company’s ability to pay interest on outstanding debt. It’s what analysts call the “interest coverage ratio.” The company has a debt on enterprise value of 13%.


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