We feel now is a pretty good time to analyse Groupon, Inc.'s (NASDAQ:GRPN) business as it appears the company may be on the cusp of a considerable accomplishment. Groupon, Inc., together with its subsidiaries, operates a marketplace that connects consumers to merchants. On 31 December 2024, the US$557m market-cap company posted a loss of US$59m for its most recent financial year. Many investors are wondering about the rate at which Groupon will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Groupon

According to the 2 industry analysts covering Groupon, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$26m in 2026. The company is therefore projected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 135% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Groupon's growth isn’t the focus of this broad overview, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Groupon is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Groupon which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Groupon, take a look at Groupon's company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

1. Valuation: What is Groupon worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Groupon is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Groupon’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.