The pandemic hit Groupon with a vicious one-two punch of behavior modification and labor shortages which gutted demand and supply in key verticals. This valuation represents a massive 66% discount to the Company's historical average multiple of 8.7x forward year EBITDA.ĭespite the severe headwinds created by the global pandemic, Groupon's business has stabilized: Bears have continued to posit that Groupon is a melting ice cube, while completely ignoring recent evidence that proves otherwise. Even after a recent ~$90 million book value mark-up of the investment, sell-side analysts covering Groupon have continued to overlook its existence.įactoring in the SumUp investment, the market is valuing Groupon's core business at just 2.9x consensus FY 22E EBITDA at this extremely cheap valuation, very little has to go right in order for Groupon shares to increase substantially from current price levels: After deducting the value of the SumUp investment, which we estimate to be worth at least $268m, from the current enterprise value, we calculate that the market is valuing Groupon's core business at just 2.9x consensus FY 22E EBITDA. Today, the investment is worth at least $268 million yet it's been largely overlooked by market participants. The market has completely overlooked Groupon's sizable ownership stake in SumUp, which we estimate has grown to at least $268m or close to 40% of the Groupon's current enterprise value: In 2013, Groupon made a small initial investment in SumUp, a fast-growing fintech with a +50% revenue CAGR. We believe shares are worth at least $63.18 today and could exceed $98.00 in a conservative upside scenario. Market participants have completely overlooked the sizable and growing value of Groupon's investment in SumUp, and are significantly undervaluing the Company's core business, which has recently stabilized and is poised for significant growth. ( NASDAQ: GRPN) is a misunderstood Company that has been wrongly left for dead due to an antiquated bear thesis and apathetic sell-side.

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