Groupon: 5 things you should know before Q1 earnings are announced
Each week I trade insights with some of the most influential minds (CEOs, boards, shareholders, and leading journalists) in the e-commerce sector. Here are my thoughts about Groupon in advance of today’s earnings announcement.
5 things you should know:
1) Groupon announced it was selling a stake in Ticketmonster for a GAIN of about $200M at closing (timing TBD)
Given trailing twelve month EBTIDA of $89M, this is material from a financial perspective (e.g. perhaps 30 cents a share).
2) A $300M share buyback was announced
Buybacks are not always a positive signal
3) 43% of revenue last year came from overseas
Strong dollar could weight on revenue and earnings
4) Changes to FedEx and UPS’ pricing models (dimensional weight) may hurt profits
See: As Fedex and UPS change their pricing models, avoid these 9 e-commerce stocks
5) According to last month’s ‘Moving the e-Markets’ Valuation Index and a quick check today (EV/EBITDA of 42.5)
Shares may be a bit frothy
Disclosure: I don’t own GRPN, and have no plans to
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