Analysts Are Optimistic We'll See A Profit From Groupon, Inc. (NASDAQ:GRPN)

We feel now is a pretty good time to analyse Groupon, Inc.'s (NASDAQ:GRPN) business as it appears the company may be on the cusp of a considerable accomplishment. Groupon, Inc. operates a marketplace that connects consumers to merchants by offering goods and services at a discount in North America and international. The US$681m market-cap company posted a loss in its most recent financial year of US$59m and a latest trailing-twelve-month loss of US$141m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Groupon will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Consensus from 3 of the American Multiline Retail analysts is that Groupon is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$38m in 2026. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 92% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Groupon's upcoming projects, but, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Check out our latest analysis for Groupon

One thing we would like to bring into light with Groupon is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

This article is not intended to be a comprehensive analysis on Groupon, so if you are interested in understanding the company at a deeper level, take a look at Groupon's company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

1. Valuation: What is Groupon worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Groupon is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Groupon’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.