Groupon, Inc. (NASDAQ: GRPN) acts as the middleman between consumers and merchants, offering a variety of products and services at discounts via its online store. It offers consumers daily deals (in the form of online vouchers) from local merchants.
The company reported its current ratio of 0.93x on NTM basis in FY21, as compared to the industry median of 1.70x. This indicates poor working capital management and might lead to liquidity crunch. The stock tumbled ~56% and ~66% in the last nine months and one year, respectively and closed below its 50-days and 100-days simple moving averages, indicating a bearish pattern. The GRPN stock is available at a price to earnings multiples of 16.2x on TTM basis, as compared to the industry (Consumer Cyclicals) median of 7.4x. Hence, considering the aforesaid facts, we give a ‘Watch’ stance on the stock of GRPN at the closing price of USD 19.36 as of March 16, 2022. Additionally, the markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
1-Year Technical Price Chart (as on March 16, 2022). Source: REFINITIV, Analysis by Kalkine Group
Technical Analysis Summary
Note: Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.