GRPN - Groupon: Time To Lock In Gains (Rating Downgrade)

2024-07-08 08:54:21 ET

Summary

• Groupon stock has surged nearly 20% year to date, but recent performance issues are expected to drag down Q2 results.
• The company's anti-fraud software blocked legitimate orders at least through early May, which is expected to cause revenue to decline again in Q2.
• The company also continues to see declining performance in international markets.
• The stock is still cheap at ~6x forward adjusted EBITDA, but the risks are now balanced with opportunities. That makes it a good time to retreat to the sidelines.

Volatile, expensive markets are a stock-picker's market, and times like these call for active investing. I continue to favor picking shares of out-of-spotlight value plays, but also selling them off when the time is right: and that time has come for Groupon ( GRPN ), the beleaguered local deals site....

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