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Is Groupon (GRPN) a Great Value Stock Right Now?

Zacks Equity Research
·2 mins read

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is Groupon (GRPN). GRPN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

GRPN is also sporting a PEG ratio of 2.20. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GRPN's PEG compares to its industry's average PEG of 2.37.

We should also highlight that GRPN has a P/B ratio of 5.85. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 8.59. Over the past year, GRPN's P/B has been as high as 6.28 and as low as 0.70, with a median of 4.18.

These are just a handful of the figures considered in Groupon's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GRPN is an impressive value stock right now.


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