GRPN
Groupon, Inc.
$28.58
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 6.0% below fair value
You pay
$28.58
Bear
$24.34
Fair
$30.42
Bull
$36.50
Bear
$24.34
-14.8%
$1.56 × 18x P/E
Fair
$30.42
+6.4%
$1.56 × 22x P/E
Bull
$36.50
+27.7%
$1.56 × 27x P/E
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
18.3x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $19.50 from 46 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $30.42 per share.
Warnings
Wall Street's average price target is $19.50 (from 46 analysts). Our estimate is 80% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples