Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, "daily deal" specialist Groupon (Nasdaq: GRPN ) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at Groupon's business and see what CAPS investors are saying about the stock right now.
|Headquarters (founded)||Chicago (2008)|
|Market Cap||$6.8 billion|
|Trailing-12-Month Revenue||$1.9 billion|
|Management||Co-founder/Chairman Eric Lefkofsky
Co-founder/CEO Andrew Mason
|Trailing-12-Month Return on Equity||(51.8%)|
|Cash/Debt||$1.2 billion / $0|
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 90% of the 784 members who have rated Groupon believe the stock will underperform the S&P 500 going forward.
The main thing [Groupon] has going for it is that it was first in its field. But it's in a "no moat" business that virtually anyone can copy, and larger more prosperous competitors are already hot on its heels (Amazon comes to mind). Since this race is a marathon, not a dash, I think [Groupon] will soon be passed by a pack of competitors. The intense competition will drive the profit out of the business model. With low/no profits a one-trick pony won't survive, and no one will want to acquire a business that can be started and run with a server and a couple of desktops.
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