Groupon Posts Upbeat Third Quarter Results; Shares Rise 11.5%


E-commerce marketplace Groupon, Inc. (GRPN) has reported stronger-than-expected results for the third quarter ended September 30, 2021, as the company’s earnings and revenues surpassed the Street’s estimates.

Following the news, shares of GRPN jumped 11.5% to close at $25.55 in Friday’s trading session.

Revenue & Earnings

Quarterly revenues jumped 29.5% year-over-year to $214.2 million and surpassed the consensus estimate of $213.14 million. While Service revenues rose 28.3% year-over-year, Product revenues declined 89.8% year-over-year to $15.2 million.

Meanwhile, quarterly earnings stood at $0.38 per share, surpassing the consensus estimate of $0.07 per share. The company had posted earnings of $0.15 per share in the same quarter last year.

Other Operating Metrics

In other operating metrics, the company reported Total Gross Billings of $553 million for the quarter, a year-over-year de-growth of 7.4%. Also, its Global units sold stood at 15.7 million at the end of the quarter, which denotes a decline of 26% from the previous year.

Guidance

For 2021, the company forecasts revenue to be between $950 million and $975 million against the consensus estimate of $984 million.

Management Commentary

The CEO of Groupon, Aaron Cooper, said, “Throughout 2021, we have made meaningful progress expanding our Local inventory and improving the merchant experience. During the third quarter we grew our high value, active Local customer base, drove unit growth for customers who engaged with our restriction-free Deals, and demonstrated our ability to impact customer demand.”

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Recommendation

Overall, the Street has a Moderate Sell consensus rating based on 2 Holds and 1 Sell. The average Groupon price target of $33.67 implies upside potential of 31.8% from current levels. Shares have gained about 2.9% over the past year.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Groupon’s performance this quarter. According to the tool, the Groupon website recorded a 9.17% monthly decline in global visits in September. Further, year-to-date, website traffic fell 7.70%.

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