, RetailMeNot May Be Bargains Themselves

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It's probably poetically fitting that two of the leading providers of online coupons continue to get cheaper. Shares of (COUP) and RetailMeNot (SALE) opened sharply lower on Tuesday after posting their latest quarterly results.

It wasn't pretty in either camp. kicked things off Monday afternoon with its brutal report that sent the shares to open at a new all-time low on Tuesday morning.

Revenue at climbed 14 percent since the prior year's holiday quarter to hit $60 million. That's less than what analysts were expecting, and well below the 40 percent growth rate that the site operator had generated through the first nine months of the year. blames the low revenue growth on a few notable advertisers that didn't repeat holiday campaigns from 2013, but the company's outlook suggests that weakness will linger. is eyeing just $52 million to $54 million for the current quarter, implying less than 5 percent growth over the $51.5 million it served up during last year's first quarter. That's pretty jarring when Wall Street was forecasting $66.3 million for the period. sees growth accelerating for the balance of the year if we go by its full-year forecast of $275 million to $290 million -- 24 percent to 31 percent higher than last year -- but investors are going to put more faith in the near-term shortfall than the potential to bounce back later this year.

Deeper Discounts

RetailMeNot held up better than, but only relative to expectations. Revenue may have moved 11 percent higher to $87.4 million, but analysts were settling for a mere 10 percent advance. Adjusted earnings actually surpassed expectations, something that has consistently happened since it went public two years ago.

RetailMeNot's stock still moved lower after Tuesday morning's report. A good chunk of the drop can be attributed to the weakness at, but RetailMeNot also offered up uninspiring guidance. It sees revenue actually declining for the current quarter when pitted against last year's first quarter, and its outlook calls for revenue to grow a mere 4 percent to 8 percent for all of 2015.

Where did this niche go wrong? Everyone loves bargains, and online coupons and discount codes are win-win situations for hungry merchants and deal-seeking shoppers. Unfortunately for two of the leading standalone players in this field, it's just not enough.

Marking Down the Players

RetailMeNot went public at $21 two summers ago. followed with its own IPO at $16 in early 2014.

Both stocks got rocked last year. RetailMeNot shares surrendered nearly half of their value.'s stock traded as high as $33 on its first day of trading 11 months ago, but it closed out the year in the teens.

The big markdowns opened the door for turnarounds this year, but neither company is giving investors a reason to get excited here. The good news is that both companies are still flush with cash from their stock offerings, and they are both putting some of that greenery to good use. and RetailMeNot announced this week that their boards had authorized the spending of $50 million and $100 million, respectively, on share buybacks. If the market can't spot a bargain, the two companies think they can.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends RetailMeNot. Try any of our Foolish newsletter services free for 30 days. Shopping for a good stock? Check out our free report on the Apple Watch to learn where the real money is to be made for early investors.
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