Why Groupon Stock Plunged 14% at the Open Today
Shares of Groupon (NASDAQ: GRPN), which provides online coupon-based marketing solutions for retailers, fell sharply at the open of trading on May 10, losing roughly 14% of their value in the first few minutes of the day. The big news was the company's May 9 first-quarter 2022 earnings release, which hit the street after the close. Investors clearly did not like what they saw.
There are really two stories here. The first is obvious, but it is still important to note. On the top line, Groupon brought in $153 million in revenue from its coupon business in the first quarter of 2022. That was down from $173 million in the same quarter of 2021. Not only were revenues down year over year, but they also missed analyst expectations. That's not a great showing, given that the economy has been performing pretty well, though management noted that business was likely muted because retailers didn't need to offer discounts to attract customers. That makes sense but suggests Groupon's business is likely to perform poorly when economic conditions are good -- not a huge selling point for the stock. On the bottom line, Groupon posted an adjusted loss of $0.80 per share in the quarter, down from an adjusted profit of $0.25 per share in the year-ago period. Wall Street was expecting an adjusted loss of around $0.46 per share. In other words, Groupon missed on the top and bottom lines, which investors usually view unkindly.
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Source Fool.com
