Does Groupon's Turnaround In Q4 Signal Recovery and Resolve Concerns?

Groupon Inc GRPN reported fourth-quarter fiscal 2023 revenue of $137.7 million, beating the consensus of $136.7 million, and declining by 7% year-on-year.

Adjusted EPS of $0.30 beat the consensus of $0.12. The stock price climbed after the results, only to give up gains later.

North America revenue decreased 6% Y/Y to $99.9 million, driven by a decline in demand for its Goods categories. 

International revenue fell 10% Y/Y (15% Y/Y FX-neutral basis) to $37.8 million owing to lower demand for the Goods category and an overall decrease in demand. 

Global billings decreased by 6.8% Y/Y to $436.3 million on lower Goods and Travel business billings. Global units sold in the quarter were 11.2 million, down 18% Y/Y.

Adjusted EBITDA stood at $26.9 million vs a loss of $(5.3) million a year ago.

Net cash generated in operating activities came in at $54.5 million in the quarter, and cash and cash equivalents stood at $141.6 million as of December 31, 2023.

“Significant improvement in our North America local and travel categories is a positive indicator that our transformation plan is working. In addition, our improved financial performance and increased liquidity resolves our going concern issue,” said Dusan Senkypl, Interim CEO of Groupon.

Investors can gain exposure to the stock via Global X E-Commerce ETF EBIZ and Global X Social Media ETF SOCL.

GRPN Stock Prediction For 2024

Equity research can be a valuable source of information for learning about a company's fundamentals. Analysts create financial models based on the fundamentals and expected future earnings of a company to arrive at a price target and recommendation for the stock.

Shares of Groupon have an average 1-year price target of $7.5, representing an expected downside of 59.02%.

Because of differences in assumptions, analysts can arrive at very different price targets and recommendations. 1 analysts have bearish recommendations on Groupon, while No analysts have bullish ratings. The street high price target from Goldman Sachs is $7.5, while the street low from Goldman Sachs is $7.5.

Price Action: GRPN shares traded lower by 3.85% at $17.47 premarket on the last check Friday.

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