The company ousted co-founder and CEO Andrew Mason in March, helping the stock quadruple from a low of $2.60 to close at $8.95 on July 2. New CEO Eric Lefkofsky has had some success improving market sentiment. On July 2, Wunderlich Securities initiated coverage with a Buy.
Groupon is offering new business solutions to the restaurant and hospitality businesses like Breadcrumb, an iPad-based app credit card reader similar to Go Payment from Intuit Inc. (NASDAQ:INTU), PayPal from eBay Inc (NASDAQ:EBAY), and Square.
Intuit Inc. (NASDAQ:INTU) sold off its financial services division on July 1, shedding its financial software for banks and hospitals divisions to concentrate on core competencies, small businesses, and tax preparation. I already liked Intuit for its business solutions for small businesses, management, and savvy acquisitions. Its reorganization is promising and helping to buoy the stock.
Intuit Inc. (NASDAQ:INTU) trades at the most reasonable trailing P/E of all these names at 21.45, offering a 1.10% yield at a 29% payout ratio. It has a five star CAPS rating. The balance sheet is fairly clean with total cash of $2 billion and $500,000 in total debt, but not as clean as Groupon with no debt and $1.17 billion in cash, or OpenTable with zero debt and $96.55 million in cash.
Groupon Inc (NASDAQ:GRPN)’s biggest competitor is e-commerce titan Amazon.com, Inc. (NASDAQ:AMZN). Amazon’s forward P/E is 88.67 and its market cap is $129 billion. The stock is near all-time highs…again as smaller competitors like Barnes & Noble fall to the wayside with Barnes & Noble forced to drop the Nook.
Amazon’s Prime streaming membership, its original content, Fires and Kindles are all pathways to the e-commerce site where almost anything one could want from pet supplies, books, tools, and fresh groceries can be delivered to your house with ever increasing swiftness.
Despite a 15.22 price/book and a negative profit margin of 0.14%, Amazon continues to crush shorts. Analysts have a 37.15% five year EPS growth rate. While the fundamentals may scare a value investor, growth investors smile ear to ear like the Amazon logo.
Ssshhh..here’s a tip
Groupon users are famously poor tippers, yet Reserve could be a tipping point for Groupon Inc (NASDAQ:GRPN). The stock moved over 3% just on the Reserve announcement so the market likes it. OpenTable traded down on the news on possibly justified fears of declining market share.
Amazon is not competing against Reserve and is just unstoppable with new initiatives and good news. Intuit’s the value name here and its reorganization looks good.
The article Discretion Is the Better Part of Groupon originally appeared on Fool.com and is written by AnnaLisa Kraft.
AnnaLisa Kraft has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Intuit, and OpenTable. The Motley Fool owns shares of Amazon.com and Intuit. AnnaLisa is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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