To printable coupon fans, Coupons.com is far and away the best site out there. With hundreds of offers available every day, there’s bound to be something for everyone. To investors, though, Coupons.com is shaping up to be a big disappointment. And that could ultimately determine whether the company is around long enough to continue offering plentiful printable coupons at all.
Coupons.com’s stock got hammered on Thursday, a day after reporting yet another quarterly loss – an even larger loss than analysts had expected. Net loss for the quarter was $6.9 million, enough to send the company’s stock price plunging to its lowest level yet. After going public in March with a IPO price of $16, Coupons.com shares surged to $30 on the first day of trading. The price topped out at $30.17 in June. And on Thursday, Coupons.com closed at a mere $14.91 – even lower than its initial offering price.
It seems Coupons.com is a lot better at saving money for shoppers, than it is at making money for shareholders.
To be fair, most of the quarterly loss reported Thursday involved stock-based compensation costs. And the number of coupons printed, as well as revenue, have both climbed compared to the same time last year. But the fact remains that Coupons.com still hasn’t turned a profit.
Ever.
And this is a company that’s been around since 1998.
The company continues to reassure investors that it’s about to turn the corner. “With hundreds of billions of dollars spent by CPGs and retailers, and as the shift to digital couponing continues, we have a large and growing opportunity ahead of us,” Coupons.com CEO Steven Boal said on Thursday’s earnings conference call.
That’s similar to what companies like RetailMeNot and Groupon have said after going public. But they’re suffering, too. Groupon, which reported its own disappointing quarterly earnings a day before Coupons.com did, took a tumble this week and is now trading at less than six bucks a share – down 80% from its peak. And RetailMeNot, which also released its quarterly earnings this week, reported that profits fell more than expected, so its stock price has fallen as well.
Despite the fact that all three companies offer some form of coupons and deals, they’re very different businesses. But the more they try to diversify and expand, the more they overlap – Groupon now offers coupon codes, RetailMeNot offers printable retail coupons and Coupons.com features offers for non-grocery items and is working with retailers to provide store-specific deals.
That’s increasingly leading many investors to lump them all together. “We’re at the point of coupon exhaustion,” analyst Kimberly Opiatowski told Bloomberg. “There’s so much competition in the space that even though these companies aren’t meant to compete against each other, this landscape is changing and they’re bumping into each other.”
But at least RetailMeNot and Groupon are, occasionally, profitable. Can Coupons.com survive without actually making its increasingly-antsy investors any money?
It depends on how long investors are willing to wait for great things to happen. You may have heard of a little company called Amazon.com, which has made minimal profits over the past couple of decades, yet it remains a retail darling. And investors have pumped up its stock price to well over $300 a share – some twenty times Coupons.com’s valuation.
“Amazon, as best I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers,” Slate’s Matthew Yglesias once noted wryly. “It’s a truly remarkable American success story.”
So don’t count Coupons.com out just yet. When it comes to growing a successful business, it seems profits are sometimes overrated.
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This financial report is rather surprising to me. Coupons.com continues to be the biggest source of coupons for my audience, topping all the competitors. I think if they offered more organic and gluten-free products, it might help them.
I don’t think they’ll be around much longer. I think they have to get into digital coupons linked to the store cards. That much more economical. They will still have their ad revenue & the money paid to them by the companies who put up their coupons.
Do you think coupons.com will be around in another five years?
Is anyone else printing less from them these days? I don’t print as much from them, as much as I am now seeking out better coupons elsewhere online.