The saga over at Groupon (GRPN 0.21%) picked up steam after the online deals provider announced Q3 results after the close Nov. 8. At first glance, year-over-year growth was impressive, several landmarks in Groupon's history were surpassed, and earnings were essentially nil versus a $54 million loss a year ago. It's all good, right?

Missing estimates behind Groupon's plummeting stock price
It's the fear of every company before announcing earnings: Did we meet expectations? Unfortunately, as highlighted by Groupon's Q3 results, simply growing against a comparable quarter won't suffice. If simple growth were all that's needed, Groupon's share price would be flying high.

Alas, Q3 elicited analysts' "deal fatigue" label when describing the results and future prospects for Groupon, and a host of downgrades quickly followed in the wake of competition from the likes of Amazon.com's (AMZN 1.04%) LivingSocial deals site, and new entries to the market, including Google (GOOGL -0.17%) Deals and Facebook's (META 0.90%) printable coupons.

Expectations were for Groupon to generate $591 million in revenue and lose $0.03 a share in earnings. Obviously, one out of two won't cut it with Groupon investors. Revenues for Groupon's third quarter ended at $568.6 million, a none-too-shabby 32% improvement compared with Q3 of 2011, but shy of estimates. Earnings, on the other hand, were abetter than analyst predictions. A net loss of $3 million, essentially $0.00 per share, was better than the expected $0.03-per-share loss but couldn't overcome the revenue "shortcoming."

Operating income skyrocketed compared with last year, allowing Groupon to pad the balance sheet even further; it now boasts cash and equivalents of $1.2 billion. That kind of ready cash, coupled with zero long-term debt, hasn't done much to appease Groupon shareholders.

There were a few milestones in Groupon's third quarter that seem to have gotten swept under the rug. Groupon surpassed the 200 million subscriber mark in Q3, has 39.5 million active customers (up 37% versus last year), and has more than 100,000 unique merchant accounts for the third quarter running.

Have any contrarian in you?
The bloated balance sheet and plummeting stock price have put Groupon shareholders in an interesting situation: Even with the additional shares outstanding (now at 653 million) following the end of its stock lock-up period, there is nearly $2.00 in net cash for each and every share of Groupon stock.

At its current $2.76 stock price, it's not a stretch to think Groupon's business lines and long-term prospects are worth more than $0.76 a share (the stock price less nearly $2.00 in cash). If you have a little contrarian blood in you, at these levels, Groupon is worth adding to the aggressive piece of your portfolio. With nearly $2 a share in cash, how much downside risk is there?