QS Research · Michael Burry's Scion Capital analyst template · 2006
Groupon, Inc. (GRPN)
As of 2026-11-09 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case -18% · downside -73% · upside +32%
The market is paying $15.49 (N1) for a levered stub whose TTM revenue is $497.4M, EBIT $4.7M and net income -$125.7M (N10,N12,N15); on that same TTM base the peer-median 1.29x EV/Sales gives $12.66 (-18%), a 0.6x downside gives $4.22 (-73%), and the 1.93x upside gives $20.48 (+32%) (S1,N24,N22,N5). Cycle-normalized earnings do not rescue it: FY2020-FY2025 operating income averaged -$72.6M a year and free cash flow -$77.5M (S2), so the call rests on TTM/FY2025 cash flow rather than positive normalized earnings. The 2026-08-06 Q2 release and raised FY2026 Adjusted EBITDA guide ($75-80M) are the dated catalysts for the rerated case multiples (S5,S6), but the base and downside point down while 30.9% short interest creates squeeze risk (N31). I am not short because the +32% upside case is above the +25% short rule, and I am not long because base value is below the price and shareholders' equity is -$72.2M (N23).
Key numbers
- Share price: $15.49
- Market cap: $629.9M
- Latest financial period: TTM to Jun 30, 2026
- Revenue (TTM): $497.4M
- EV / EBITDA (TTM): 37.7x
The 15 boxes
- ✓ 1. Long-form business notes
Groupon is a two-sided local commerce marketplace earning commissions on third-party merchant sales, with North America and International segments and Local/Goods/Travel categories. Between the FY2020 10-K and FY2025 10-K, the model shifted from first-party Goods product revenue toward a third-party marketplace; revenue fell from $1.42B to $498.4M, headcount fell from 4,159 to 1,734, and operating income moved from -$277.1M to +$23.6M while FY2025 net income remained negative at -$83.5M. The provided sources contain only annual FY2020-FY2025 data; no TTM or Q3 2026 figures are available here.
- ✓ 2. Competitive advantage
Groupon shows no durable advantage in either its disclosures or its numbers: revenue fell from $1.42B (FY2020) to $498.4M (FY2025) and gross profit from $677.3M to $452.5M, with operating income negative in FY2020-FY2023 and only $8.8M (FY2024) and $23.6M (FY2025), while pre-tax income stayed negative (-$45.5M) in FY2025. The FY2025 gross margin of roughly 91% is a mix effect from a third-party Goods marketplace, not pricing power, and it is consumed by the cost of buying traffic. The 10-K names competitors with greater scale (Google, Meta, ByteDance/TikTok) who also own the channels Groupon uses to acquire customers, and admits 'relatively low barriers to entry' on both sides of its marketplace.
- ✓ 3. 10-Q takeaways
Q2 2026 (three months ended June 30, 2026) was flat-to-down: revenue $124.7 million versus $125.7 million, billings $413.7 million versus $416.7 million, units down 7%, with TTM active customers up 2% to 16.1 million. The reported swing to a $1.5 million loss from continuing operations from $20.6 million of income a year earlier is mostly a prior-year artifact ($10.65 million gain on sale of business and $18.5 million of other income, largely FX gains in Q2 2025); operating loss was only $0.7 million and Adjusted EBITDA was $14.8 million, at the high end of guidance. Management guides Q3 2026 revenue to $128-130 million and Adjusted EBITDA to $19-21 million, and FY2026 revenue to $513-523 million with at least $60 million of free cash flow. Cash fell to $226.3 million at June 30, 2026 from $296.1 million at December 31, 2025, and stockholders' equity is a $72.2 million deficit.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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