1-Star Stocks Poised to Plunge: Groupon?

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, "daily deal" specialist Groupon (NAS: GRPN) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Groupon's business and see what CAPS investors are saying about the stock right now.

Grouponfacts

Headquarters (founded)Chicago (2008)
Market Cap$9.6 billion
IndustryInternet retail
Trailing-12-Month Revenue$1.6 billion
ManagementCo-founder/Chairman Eric Lefkofsky
Co-founder/CEO Andrew Mason
Trailing-12-Month Return on Equity(75.2%)
Cash/Debt$1.1 billion / $0
CompetitorsFacebook
Google
Hungry Machine

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 91% of the 654 members who have rated Groupon believe the stock will underperform the S&P 500 going forward.

Just last month, one of those Fools, All-Star TerryHogan, succinctly summed up the bear case for our community:

I'll always take a chance on shorting (with CAPS money only!) anyone with the slightest whiff of dodgy accounting. [I]f it turns out to be true you've usually got a home run on your hands. I also think this is a pretty competitive space and even without that it feels kind of like a pet rock or a pair of parachute pants.

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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Google. Motley Fool newsletter services have recommended buying shares of Google. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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