GRPN · Groupon
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $16.25
Note written ·
Price against the kill line
23.6% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $16.25, on record since 11 November 2026. The shares are down 38.9% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $16.25, the close before the 9 November 2026 results, which would erase the post-report decline and show the shares leading. Fourth-quarter adjusted EBITDA above the $23 million top of guidance would also show the call wrong.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Communication Services
Quarter to 30 September 2026, filed 9 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 126
- Revenue, change on a year (%)
- +2.1
- Gross margin (%)
- 90.4
- Operating margin (%)
- 3.4
- Free cash flow, four quarters ($M)
- 8.8
- Net cash, cash less debt ($M)
- −129
- Enterprise value to sales (×)
- 1.3
- Enterprise value to operating income (×)
- 92.9
All filed numbers
What Groupon reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 126 | +2.1 | 90.4 | 3.4 |
| first filed | 125 | −0.8 | 91.0 | −0.6 |
| first filed | 117 | 0.0 | 90.5 | −2.8 |
| first filed | 133 | +1.8 | 90.4 | 4.9 |
| first filed | 123 | +7.3 | 91.1 | 1.8 |
| first filed | 126 | +0.9 | 91.0 | 10.4 |
| Pre-tax income ($M) | 2.7 |
| Net income ($M) four quarters: −8.4 | −1.1 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +0.1 |
| Operating cash flow ($M) | 21.6 |
| Capital spending ($M) | 12.8 |
| Free cash flow ($M) | 8.8 |
| Cash and short-term investments ($M) | 177 |
| Debt ($M) long-term debt | 306 |
| Net cash, cash less debt ($M) | −129 |
| Deferred revenue ($M) +7.4% on a year | 1.7 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 21.1 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | −72.6 |
| Market value ($M) | 497 |
| Enterprise value, market value plus net debt ($M) | 625 |
| Enterprise value to sales (×) | 1.3 |
| Enterprise value to operating income (×) | 92.9 |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | Not meaningful |
| Free-cash-flow yield (%) | 1.8 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 31.4% of shares outstanding sold short, 15.4 days of average trading to cover, +4.1% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $0 | $0 |
The thesis
Groupon's shares are more likely to lag the S&P 500 over the next three months. The third-quarter 2026 report on 9 November 2026 showed billings up 6%, but adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, adjusted) was $14.7 million against guidance of $19–21 million, free cash flow was negative $45.8 million and the full-year revenue outlook was lowered. The management investor update on 8 December 2026 and the fourth-quarter report, expected around 26 February 2027, show whether billings growth of 4–6% turns into profit and cash.
The market has already marked the shares down hard. They closed at $12.51 on 10 November 2026, the first session after the release, and at $12.21 on 12 November 2026. That is below both the 50-day average of $17.85 and the 200-day average of $17.60, and the three-month change is −43.2%. The price reflects the profit miss and the cash burn, and it does not yet reflect a fourth-quarter result that shows the cost cuts working.
The company's release put full-year 2026 revenue at $500–503 million, adjusted EBITDA at $60–65 million and free cash flow at no less than $40 million.
Bullish and bearish views on Groupon, Inc.
The bull case on Groupon, Inc. (GRPN), in brief: billings turned positive. The bear case: profit missed the company's own guide.
Bull case
- Billings turned positive. Third-quarter billings rose 6%, after falling 1% in both the first and second quarters of 2026 (Groupon results, 6 August 2026 and 9 November 2026). A Panabee summary puts third-quarter billings at $439.1 million.
- International is growing. International local revenue rose 12% in the third quarter while North America local revenue was flat (Groupon release, 9 November 2026).
- The fourth-quarter guide keeps growth. Groupon guided fourth-quarter billings up 4–6%, revenue of $133–136 million, adjusted EBITDA of $18–23 million and positive free cash flow (release, 9 November 2026).
- Cost cuts are under way. The 2026 restructuring plan is expected to save $20–25 million a year, with $7–10 million of total pre-tax charges. Most headcount reductions were complete by the end of the third quarter, and charges that quarter were $2.3 million (release, 9 November 2026).
- A new product is live. On 15 October 2026 Groupon relaunched LivingSocial as an agent-first experience marketplace in public preview, with more than 50,000 local experiences across the United States (release, 9 November 2026). No sales figure for it has been reported.
Bear case
- Profit missed the company's own guide. Adjusted EBITDA of $14.7 million compares with guidance of $19–21 million given on 6 August 2026 and $17.5 million a year earlier (Groupon, 9 November 2026).
- Revenue and earnings missed estimates. Company news shows third-quarter revenue of $125.450 million against an estimate of $129.393 million, and a loss of $0.03 per share against an estimated loss of $0.01 (9 November 2026).
- Cash burn is heavy. Third-quarter free cash flow was negative $45.8 million, with $43.2 million of operating cash outflow and $2.6 million of capital spending (release, 9 November 2026). Cash was $177.4 million at 30 September 2026, and a Panabee summary says that is down $118.6 million since the start of the year.
- Customers and units are not growing. Active customers were 16.2 million, roughly flat, and unit sales were 9.0 million, down 2% (release, 9 November 2026). The 6% billings gain came without more buyers or more units.
- Revenue trails billings. Third-quarter revenue rose 2% against billings up 6% (release, 9 November 2026). The full-year revenue guide of $500–503 million implies growth of flat to 1%.
Price setup
The shares closed at $15.58 on 5 November 2026 and $15.49 on 6 November 2026. After the results they closed at $12.51 on 10 November 2026 and $12.82 on 11 November 2026, then slipped to $12.21 on 12 November 2026, which gave back most of the one-day rebound.
The 52-week intraday high is $29.90, set on 5 August 2026, and the last close is 59.2% below it. The 52-week closing low is $9.64 on 13 March 2026. The 50-day average of $17.85 and the 200-day average of $17.60, both as of the 12 November 2026 close, sit well above the price.
Director Ajay V. Mittal received a grant of 7,036 shares on 9 November 2026 (SEC Form 4, filed 10 November 2026). The filing records an award, not an open-market purchase. Chief Accounting Officer Kyle Netzly exercised options on 6,936 shares at $19.08 on 18 September 2026 and had 2,865 shares withheld for tax (Form 4, filed 22 September 2026).
The company filed its Form 10-Q for the quarter ended 30 September 2026 on 9 November 2026. Analyst targets dated before that report are out of date and are not cited here.
Catalysts ahead
- 8 December 2026: Groupon management investor update in New York, webcast live. First management presentation since the profit miss and lowered revenue outlook; the release did not mention buybacks, so any capital return or debt plan would be new information.
- ~26 February 2027 (est.): Fourth-quarter and full-year 2026 report. Tests the 4–6% fourth-quarter billings guide, positive free cash flow, fourth-quarter adjusted EBITDA of $18–23 million and full-year adjusted EBITDA of $60–65 million.
What would change the view
A daily close above $16.25, the close before the 9 November 2026 results, which would erase the post-report decline and show the shares leading. Fourth-quarter adjusted EBITDA above the $23 million top of guidance would also show the call wrong.
What it trades with
The shares have moved on company events in 2026: the July squeeze, the 5 August 2026 high, the 21 September 2026 shareholder letter asking for buybacks and the drop after the 9 November 2026 results. Sector or peer trends have not driven them, and no peer correlation figures are published for this note.
The evidence, claim by claim (8)
- Third-quarter 2026 revenue rose 2% and billings rose 6%; adjusted EBITDA was $14.7 million versus $17.5 million a year earlier; loss from continuing operations was $0.8 million. Groupon third-quarter 2026 results release · as of
- Third-quarter free cash flow was negative $45.8 million (operating cash outflow $43.2 million, capital spending $2.6 million); cash was $177.4 million at 30 September 2026. Groupon third-quarter 2026 results release · as of
- Full-year 2026 guidance: revenue $500–503 million, adjusted EBITDA $60–65 million, free cash flow at least $40 million. Groupon third-quarter 2026 results release · as of
- Fourth-quarter 2026 guidance: billings growth 4–6%, revenue $133–136 million, adjusted EBITDA $18–23 million, positive free cash flow. Groupon third-quarter 2026 results release · as of
- Third-quarter revenue of $125.450 million missed the $129.393 million estimate; loss per share of $0.03 compared with an estimated loss of $0.01. Company news summary of third-quarter 2026 results · as of
- Active customers were 16.2 million, roughly flat, and unit sales were 9.0 million, down 2%, in the third quarter of 2026. Groupon third-quarter 2026 results release · as of
- Third-quarter guidance given on 6 August 2026 was billings growth of 4–6%, revenue of $128–130 million and adjusted EBITDA of $19–21 million; billings fell 1% in the first and second quarters of 2026. Groupon second-quarter 2026 results release · as of
- Management will host an investor update in New York on Tuesday, 8 December 2026, webcast live; the release does not mention share repurchases. Groupon third-quarter 2026 results release · as of
Sources
- Global Revenue up 2% and Billings up 6% · finanznachrichten.de
- Groupon Reports Third Quarter 2026 Results · finance.yahoo.com ·
- Groupon (GRPN) Q3 2026 Earnings: Groupon Affirms FY26 Guidance · panabee.com
- Global Revenue and Billings down 1% · newsfilecorp.com