Should I Buy groupon (GRPN)? Finance YouTuber Analysis

The YouTuber is giving Groupon 'one last chance' to prove itself, noting its market cap is essentially equal to its stake in a private payment startup, implying no value for its core business. Despite burning cash, it has a strong balance sheet and runway for restructuring, with expectations low enough for a potential upside surprise in Q4 earnings.

“Giving the company one last chance to prove it can do something to improve the outlook here. Okay, been investing in Groupon for about a little over a year now. It has done nothing but drop.”

The YouTuber sees Groupon as a hidden value, noting its net cash position and a significant stake in the UK fintech platform SumUp, which he values at more than Groupon's entire market cap. He believes any good news, such as increased revenue from a new Google Pay deal, could trigger a short squeeze.

“groupon also has a 2.4 ownership in uk fintech platform sum up this is a private company but the latest funding round valued at 20 billion dollars now valuations for private companies have come down in the crash but even if sum up is worth just 15 billion dollars that 2.4 stake is worth 360 million to groupon that's the entire market cap of the stock right now”

The YouTuber likes Groupon due to its connection to consumer spending, potential for a takeover, and a steep valuation discount. He believes the stock could be worth $30 a share or more based on its cash and investments.

“On that environment I like beaten down Groupon ticker GRP in one of the seven stocks I highlighted recently in a video on my largest investments.”

The YouTuber considers Groupon the most mispriced stock in the market, highlighting its substantial net cash position and a significant investment in the fintech company SumUp, which alone exceeds Groupon's current market capitalization. With a new CEO and a recent deal with Google, there are multiple catalysts for growth and potential acquisition interest from major tech companies. The stock is projected to be worth at least $30, potentially $40-$50.

“This next stock is by far my largest position at over 75,000 and a lot of you are going to groan when you see it but hear me out because this is the single biggest mispriced stock in the stock market right now.”

The analyst advises avoiding Groupon due to its declining revenue, lack of profitability, and a business model that struggles to compete with larger players like Amazon and Google. Despite a potential acquisition by Amazon, the underlying business fundamentals are weak, making it a risky investment.

“I'm not seeing any reason to buy Groupon. It's a company that's been struggling for a long time.”