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Why Is Groupon (GRPN) Up 7.7% Since Last Earnings Report?
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It has been about a month since the last earnings report for Groupon (GRPN - Free Report) . Shares have added about 7.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Groupon due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Groupon’s Q1 Earnings and Revenues Miss Estimates
Groupon reported first-quarter 2022 non-GAAP loss of 80 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 46 cents. The company had reported non-GAAP earnings per share of 25 cents in the prior-year quarter.
Revenues of $153.3 million missed the Zacks Consensus Estimate by 7.54%. The figure declined 42% on a year-over-year basis (down 41% excluding foreign exchange effect).
Region-wise, North America revenues plunged 25% from the year-ago quarter’s level to $110.2 million. International revenues fell 63% (down 61% excluding foreign exchange effect) year over year to $43.2 million.
Quarterly Details
Service revenues (100% of revenues) were down 11.2% year over year to $153 million. The company did not generate Product revenues in the reported quarter compared with $91.2 million reported in the year-ago period.
Consolidated local revenues of $130.07 million declined 12.4% from the year-ago quarter’s level. Excluding the foreign exchange effect, North America Local revenues decreased 22.7% while International Local revenues increased 51.2%, year over year.
Consolidated Travel revenues increased 20.1% year over year to $8.17 million. North America Travel revenues declined 16.9% year over year. International Travel revenues reached $3.2 million in the reported quarter.
On a consolidated basis, Goods revenues declined 86.1% year over year to $15.07 million. North America Goods revenues declined 47.9% while International Goods revenues plunged 92.1%, excluding foreign exchange effect, on a year-over-year basis.
In the first quarter, consolidated gross billings were $460.6 million, down 15.2%, excluding the foreign exchange effect.
North America gross billings were $309.9 million, down 19% year over year. International billings were $150.7 million, down 6.6% excluding the foreign exchange effect.
North America Local, Travel and Goods gross billings decreased 11.4%, 23.7% and 47.5%, on a year-over-year basis, respectively.
International Local gross billings rose 51.1% while Goods gross billings declined 61.4% on a year-over-year basis, excluding the foreign exchange effect.
Owing to the coronavirus crisis-induced negative impact on demand, consolidated units sold during the reported quarter fell 28.9% year over year to 12.66 million.
Region-wise, North America units were down 32.8%, while International units were down 21.6% year over year
Customer Metrics
As of Mar 31, 2022, Groupon had approximately 22.2 million active customers compared with 23.3 million at the end of the previous quarter.
As of Mar 31, 2022, the company had approximately 14 million active customers based in North America and 8.2 million active international customers.
Operating Details
In the first quarter, gross profit came in at $134 million, down 19.8% (down 18.4%, excluding foreign exchange effect) year over year.
Coming to the North America region, gross profit decreased 27.7% to $94.2 million. Local, Travel and Goods categories reported a gross profit decrease of 11.4%, 23.7% and 47.5%, on a year-over-year basis, respectively.
International gross profit increased 8.6% year over year and 15.2% excluding the foreign exchange effect to $39.7 million. Under the International segment, excluding the foreign exchange effect, the Local category reported a gross profit increase of 50.9%. Goods category gross profit plunged 52.7% year over year.
Non-GAAP adjusted EBITDA was negative $7 million against an adjusted EBITDA of $30.4 million reported in the prior-year quarter.
Selling, general and administrative (SG&A) expenses fell 0.6% year over year to $126.4 million in the reported quarter. Marketing expenses increased 17.1% year over year to $39.4 million.
The company reported an operating loss of $34.3 million against an operating income of $14.4 million in the prior-year quarter.
Balance Sheet & Cash Flow
Groupon exited the quarter ending Mar 31, 2022, with cash and cash equivalents of $403 million, down from $498.7 million as of Dec 31, 2021.
In the first quarter, the company used $78.1 million of operating cash flow compared with $31 million generated in the prior quarter.
The company reported a free cash outflow of $91.1 million compared to $19.2 million of free cash flow reported in the previous quarter.
Guidance
For the second quarter of 2022, Groupon expects to deliver $155 million to $165 million of revenues and $0 million to $10 million of adjusted EBITDA.
For the full year 2022, Groupon expects to deliver $670 million to $700 million of revenues and $60 million to $80 million of adjusted EBITDA.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -76.74% due to these changes.
VGM Scores
Currently, Groupon has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Groupon has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Groupon is part of the Zacks Internet - Commerce industry. Over the past month, TripAdvisor (TRIP - Free Report) , a stock from the same industry, has gained 8.9%. The company reported its results for the quarter ended March 2022 more than a month ago.
TripAdvisor reported revenues of $262 million in the last reported quarter, representing a year-over-year change of +113%. EPS of -$0.09 for the same period compares with -$0.39 a year ago.
TripAdvisor is expected to post earnings of $0.27 per share for the current quarter, representing a year-over-year change of +485.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +35.4%.
TripAdvisor has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Why Is Groupon (GRPN) Up 7.7% Since Last Earnings Report?
It has been about a month since the last earnings report for Groupon (GRPN - Free Report) . Shares have added about 7.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Groupon due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Groupon’s Q1 Earnings and Revenues Miss Estimates
Groupon reported first-quarter 2022 non-GAAP loss of 80 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 46 cents. The company had reported non-GAAP earnings per share of 25 cents in the prior-year quarter.
Revenues of $153.3 million missed the Zacks Consensus Estimate by 7.54%. The figure declined 42% on a year-over-year basis (down 41% excluding foreign exchange effect).
Region-wise, North America revenues plunged 25% from the year-ago quarter’s level to $110.2 million. International revenues fell 63% (down 61% excluding foreign exchange effect) year over year to $43.2 million.
Quarterly Details
Service revenues (100% of revenues) were down 11.2% year over year to $153 million. The company did not generate Product revenues in the reported quarter compared with $91.2 million reported in the year-ago period.
Consolidated local revenues of $130.07 million declined 12.4% from the year-ago quarter’s level. Excluding the foreign exchange effect, North America Local revenues decreased 22.7% while International Local revenues increased 51.2%, year over year.
Consolidated Travel revenues increased 20.1% year over year to $8.17 million. North America Travel revenues declined 16.9% year over year. International Travel revenues reached $3.2 million in the reported quarter.
On a consolidated basis, Goods revenues declined 86.1% year over year to $15.07 million. North America Goods revenues declined 47.9% while International Goods revenues plunged 92.1%, excluding foreign exchange effect, on a year-over-year basis.
In the first quarter, consolidated gross billings were $460.6 million, down 15.2%, excluding the foreign exchange effect.
North America gross billings were $309.9 million, down 19% year over year. International billings were $150.7 million, down 6.6% excluding the foreign exchange effect.
North America Local, Travel and Goods gross billings decreased 11.4%, 23.7% and 47.5%, on a year-over-year basis, respectively.
International Local gross billings rose 51.1% while Goods gross billings declined 61.4% on a year-over-year basis, excluding the foreign exchange effect.
Owing to the coronavirus crisis-induced negative impact on demand, consolidated units sold during the reported quarter fell 28.9% year over year to 12.66 million.
Region-wise, North America units were down 32.8%, while International units were down 21.6% year over year
Customer Metrics
As of Mar 31, 2022, Groupon had approximately 22.2 million active customers compared with 23.3 million at the end of the previous quarter.
As of Mar 31, 2022, the company had approximately 14 million active customers based in North America and 8.2 million active international customers.
Operating Details
In the first quarter, gross profit came in at $134 million, down 19.8% (down 18.4%, excluding foreign exchange effect) year over year.
Coming to the North America region, gross profit decreased 27.7% to $94.2 million. Local, Travel and Goods categories reported a gross profit decrease of 11.4%, 23.7% and 47.5%, on a year-over-year basis, respectively.
International gross profit increased 8.6% year over year and 15.2% excluding the foreign exchange effect to $39.7 million. Under the International segment, excluding the foreign exchange effect, the Local category reported a gross profit increase of 50.9%. Goods category gross profit plunged 52.7% year over year.
Non-GAAP adjusted EBITDA was negative $7 million against an adjusted EBITDA of $30.4 million reported in the prior-year quarter.
Selling, general and administrative (SG&A) expenses fell 0.6% year over year to $126.4 million in the reported quarter. Marketing expenses increased 17.1% year over year to $39.4 million.
The company reported an operating loss of $34.3 million against an operating income of $14.4 million in the prior-year quarter.
Balance Sheet & Cash Flow
Groupon exited the quarter ending Mar 31, 2022, with cash and cash equivalents of $403 million, down from $498.7 million as of Dec 31, 2021.
In the first quarter, the company used $78.1 million of operating cash flow compared with $31 million generated in the prior quarter.
The company reported a free cash outflow of $91.1 million compared to $19.2 million of free cash flow reported in the previous quarter.
Guidance
For the second quarter of 2022, Groupon expects to deliver $155 million to $165 million of revenues and $0 million to $10 million of adjusted EBITDA.
For the full year 2022, Groupon expects to deliver $670 million to $700 million of revenues and $60 million to $80 million of adjusted EBITDA.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -76.74% due to these changes.
VGM Scores
Currently, Groupon has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Groupon has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Groupon is part of the Zacks Internet - Commerce industry. Over the past month, TripAdvisor (TRIP - Free Report) , a stock from the same industry, has gained 8.9%. The company reported its results for the quarter ended March 2022 more than a month ago.
TripAdvisor reported revenues of $262 million in the last reported quarter, representing a year-over-year change of +113%. EPS of -$0.09 for the same period compares with -$0.39 a year ago.
TripAdvisor is expected to post earnings of $0.27 per share for the current quarter, representing a year-over-year change of +485.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +35.4%.
TripAdvisor has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.