Head to Head Analysis: Groupon (GRPN) vs. The Competition

Groupon (NASDAQ:GRPN) is one of 142 public companies in the “Broadline Retail” industry, but how does it contrast to its peers? We will compare Groupon to similar companies based on the strength of its dividends, analyst recommendations, institutional ownership, earnings, valuation, profitability and risk.

Profitability

This table compares Groupon and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Groupon	-25.26%	N/A	-20.28%
Groupon Competitors	-3.00%	-38.43%	-2.57%

Institutional & Insider Ownership

90.0% of Groupon shares are held by institutional investors. Comparatively, 44.6% of shares of all “Broadline Retail” companies are held by institutional investors. 36.6% of Groupon shares are held by company insiders. Comparatively, 23.6% of shares of all “Broadline Retail” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Groupon and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Groupon	$498.42 million	-$83.52 million	-5.06
Groupon Competitors	$22.26 billion	$1.71 billion	15.49

Groupon’s peers have higher revenue and earnings than Groupon. Groupon is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Volatility & Risk

Groupon has a beta of 0.2, indicating that its stock price is 80% less volatile than the S&P 500. Comparatively, Groupon’s peers have a beta of 1.70, indicating that their average stock price is 70% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Groupon and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Groupon	2	0	1	0	1.67
Groupon Competitors	1404	5406	10877	309	2.56

Groupon presently has a consensus price target of $23.00, indicating a potential upside of 46.03%. As a group, “Broadline Retail” companies have a potential upside of 20.79%. Given Groupon’s higher possible upside, research analysts clearly believe Groupon is more favorable than its peers.

Summary

Groupon peers beat Groupon on 9 of the 13 factors compared.

Groupon Company Profile

Groupon, Inc., together with its subsidiaries, operates a marketplace that connects consumers to merchants. It operates in two segments, North America and International. The company sells goods or services on behalf of third-party merchants. It serves customers through its mobile applications and websites. The company was formerly known as ThePoint.com, Inc. and changed its name to Groupon, Inc. in October 2008. Groupon, Inc. was incorporated in 2008 and is headquartered in Chicago, Illinois.