Groupon will be a stock to buy for a long time.

Summary

The speaker presents Groupon as their highest-conviction investment and largest holding. They argue that the market undervalues the company and that it could become a multi-bagger, comparing their conviction to a prior investment in Coherent. The speaker says they have personal money invested and are staking their business reputation on the thesis.

Investment thesis and valuation claims

• The speaker says only three analysts cover Groupon and argues that consensus 2026 EBITDA estimates drop sharply near the end of 2025.
• They criticize the most bearish analyst’s report for allegedly omitting Groupon’s SumUp stake and not adequately accounting for the balance sheet.
• The speaker estimates the SumUp stake is worth $180–$240 million. The transcript also refers to it as “a $200 stake,” likely meaning roughly $200 million.
• Using an analyst’s $70 million EBITDA estimate and a 15× EBITDA multiple, the speaker says the stock could be worth over $25 per share. They argue a $35 share price could be justified even at $75 million of EBITDA.
• The speaker believes management’s stated EBITDA outlook of $70–$75 million is conservative and suggests a “true glide path” of $92–$100 million for 2026. These are the speaker’s estimates, not independently established guidance in the subtitles.
• Groupon is described as having about $700 million in market capitalization and approximately 90% gross margins. The speaker says it was considered a going concern roughly two years ago but argues it is no longer at risk of failing.

Operational improvement opportunity

The speaker’s central operating thesis is that Groupon could grow by improving its website, app, marketing, and customer retention. Suggestions include:

• Rebrand and redesign the site to feel more current, using thrifting and deal-seeking as a model for appealing to younger customers.
• Shift advertising away from one-off seasonal promotions and toward a broader message: check Groupon before booking experiences or making group plans.
• Improve personalized recommendations, the app, and push notifications. The speaker cites irrelevant recommendations as an example of the current user experience.
• Increase repeat usage. The speaker cites 2.3 visits per typical user per year and offers these illustrative estimates:
  • 3.3 visits: $100 million of EBITDA
  • 4.3 visits: $200 million of EBITDA
  • 5.3 visits: $300 million of EBITDA
• The speaker suggests net margins could potentially reach 50% if Groupon becomes a platform customers return to regularly.

Capital returns and risks

• The speaker says Groupon’s share count fell 7% over the prior month and a half, citing buybacks.
• They argue that if the share price stays depressed while the company generates free cash flow and continues repurchasing shares, the share count could shrink substantially.
• Key risks include execution: the valuation thesis depends on improving retention and customer experience, while the larger EBITDA figures rely on the speaker’s assumptions. The speaker also acknowledges Groupon’s dated website and weak relevance among younger consumers.

Assets and companies mentioned

• Groupon — Public equity; ticker not stated in the subtitles
• SumUp — Stake held by Groupon
• Coherent — Referenced as a comparison to a prior investment
• eBay — Referenced in a comparison about marketing and consumer awareness
• AI — Proposed as a possible concierge or recommendation tool

Disclosure and source

The speaker discloses that Groupon is their largest holding and that they have personal money invested. They encourage viewers to do their own research. No explicit “not financial advice” disclaimer appears in the subtitles.

Presenter: Not identified by name Source: Mispriced Assets channel