By the end of 2023, Groupon (GRPN) is expected to have eliminated $250 million in annualized costs. Local billings increased by 6% sequentially in the fourth quarter compared to the third.
Fourth quarter revenue of $148 million; $599 million for full year
• Fourth quarter billings of $468 million; $1.8 billion for full year
• Fourth quarter net loss of $54 million; net loss of $234 million for full year
• Fourth quarter adjusted EBITDA of negative $5 million; negative $15 million for full
• Ended the year with $281 million in cash
• Generated $10 million in free cash flow during the fourth quarter
Kedar Deshpande, CEO of Groupon, stated, “We are currently implementing a transformation strategy that we think will enable Groupon to unlock its full potential. “While we experienced some macroeconomic headwinds in 2022, we also think that we could have adapted our business model more rapidly to address the new and evolving requirements of our local customers and merchants.
Looking ahead to 2023, we are focusing the entire organization on three areas:
Improving the supply side of our marketplace to drive customer demand, leveraging an improved inventory base to make our marketing and promotional spend more efficient, and doing both of these against a backdrop of a meaningfully streamlined cost structure and much better operational rigor. We are confident that if we successfully execute in these areas, we will be able to restart the company’s growth and produce positive adjusted EBITDA with even a smaller base of sales. Given the work we have already done and the opportunities that lie ahead of us, we think we are in a good situation to add value for our clients, partners in business, staff members, and shareholders.”
Etsy is currently trading at $103; Amazon (AMZN) is trending around $100, Target (TGT) is trending around $160. Groupon is trading currently at $4. Groupon can easily bounce back by the end of 2023 which makes it a better investment and buy opportunity for the savvy investor.
I prefer GRPN over profits here. The value is reasonable, and even a rise to $30-$40 would leave it cheap in comparison to past prices with other retailers.