Groupon Offers Big Upside Potential

Groupon is going through a transformation. Investors seem concerned about this, and the stock is materially undervalued in comparison to peers such as Amazon, eBay, and RetailMeNot. If the company can sustain sales growth while increasing profit margins, however, Groupon offers substantial upside potential from current levels.

Andrés Cardenal
Andrés Cardenal
Jul 24, 2014 at 4:33PM
Consumer Goods

Groupon (NASDAQ:GRPN) is going through a deep transformation, and investors seem disappointed with the results so far. As a consequence, the stock has fallen by almost 43% over the last six months, and it looks attractively valued when compared to industry peers such as Amazon (NASDAQ:AMZN), eBay (NASDAQ:EBAY), and RetailMeNot (NASDAQ:SALE).

Customer response has been quite encouraging lately, and Groupon is generating solid sales growth. If management can sustain revenue growth while increasing profit margins in the medium term, the stock could offer substantial room for gains from current levels.

The slideshow below provides some ideas for investors willing to take a look at Groupon and its potential for gains over the coming quarters.