Please ensure Javascript is enabled for purposes of website accessibility

Why Groupon Shares Got Crushed Today

By Evan Niu, CFA - Apr 29, 2016 at 12:50PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Losses widen as the company exits several geographical markets to streamline its business.

Image source: Groupon.

What: Shares of deals marketplace Groupon (GRPN 7.10%) are getting crushed today, down by 13% as of 12:14 p.m. ET, after the company reported first-quarter earnings and losses significantly widened.

So what: Revenue in the first quarter was $732 million, which translated into an adjusted net loss of $4.6 million, or $0.01 per share. Both figures beat consensus estimates of $708 million in sales and an adjusted net loss of $0.03 per share. However, on a GAAP basis, Groupon's net loss more than tripled to $49.1 million, or $0.08 per share. Adjusted EBITDA also fell by more than half to $31.3 million.

Now what: Investors were also disappointed with the company's outlook. Groupon's 2016 outlook calls for full-year sales of $2.75 billion to $3.05 billion, which should result in adjusted EBITDA of $85 million to $135 million. The midpoint of revenue guidance is below the $3 billion that the Street was expecting. The company noted that it sold its billionth unit during the quarter. Groupon is attempting to focus its efforts in a smaller number of geographical markets as well.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Groupon, Inc. Stock Quote
Groupon, Inc.
GRPN
$11.77 (7.10%) $0.78

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.