Investment Thesis
Groupon exhibits severe financial distress with negative stockholders equity (-62.6M), negative free cash flow (-13.5M), and unprofitability despite minimal revenue growth of 1.2% YoY. The company is burning cash while unable to control operating expenses despite maintaining a strong 90.5% gross margin, creating an unsustainable trajectory with 308.2M in long-term debt and liquidity concerns.
Strengths
- Strong gross margin of 90.5% demonstrates pricing power and favorable unit economics
- Significant cash reserves of 225.5M provide short-term liquidity cushion
- Revenue base remains stable with positive albeit minimal growth
Risks
- Negative stockholders equity of -62.6M indicates balance sheet insolvency and technical bankruptcy
- Negative free cash flow of -13.5M with negative operating cash flow shows unsustainable cash burn
- Current ratio of 0.81x and quick ratio of 0.76x reveal acute liquidity stress despite cash on hand
- Operating expenses uncontrollably high relative to revenue, producing -2.8% operating margin
- Net income deteriorating 44.6% YoY with deepening operating losses
- High debt burden (308.2M) relative to financial position with negative interest coverage of -1.7x
Key Metrics to Watch
- Operating cash flow and free cash flow trajectory - path to cash flow breakeven
- Monthly cash burn rate and runway given 225.5M cash balance
- Operating expense ratio and progress toward operating profitability
- Revenue growth acceleration required to justify current cost structure
- Debt maturity schedule and refinancing capability with negative equity
Financial Metrics
Revenue
117.2M
Net Income
-12.9M
EPS (Diluted)
$-0.32
Free Cash Flow
-13.5M
Total Assets
595.9M
Cash
225.5M
Profitability Ratios
Gross Margin
90.5%
Operating Margin
-2.8%
Net Margin
-11.0%
ROE
N/A
ROA
-2.2%
FCF Margin
-11.5%
Balance Sheet & Liquidity
Current Ratio
0.81x
Quick Ratio
0.76x
Debt/Equity
N/A
Debt/Assets
110.5%
Interest Coverage
-1.65x
Long-term Debt
308.2M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-08T10:28:19.726737 |
Data as of: 2026-03-31 |
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