Is Small Cap Coupons.Com (COUP) Really a Good Deal? GRPN, LIVE & SALE

Coupons.Com Inc (NYSE: COUP) is the most recent small cap digital coupon or daily deal stock to emerge in a spectacular IPO to challenge existing players like mid cap Groupon Inc (NASDAQ: GRPN) and small caps LiveDeal Inc (NASDAQ: LIVE) and RetailMeNot Inc (NASDAQ: SALE). However and since the recent IPO, small cap Coupons.Com has been a relatively flat deal for investors.

What is Coupons.Com Inc?

Small cap Coupons.Com calls itself a leader in digital coupons that operates a promotion platform that connects brands and retailers with consumers through Web, mobile and social channels. Over 2,000 brands from more than 700 consumer packaged goods companies and many grocery, drug and mass merchandise retailers use Coupons.Com's platform to deliver digital coupons to consumers, including printable coupons, save-to-card coupon and coupon codes for e-commerce. Coupons.Com also sells advertising for its online and mobile properties and has built out a large network of retailers and publishers spanning more than  58,000 store locations in North America and approximately 30,000 third-party websites. The Coupons.com's site itself receives more than 17 million unique visitors a month on average.

As for potential digital coupon or daily deal peers, mid cap Groupon Inc provides merchants with a suite of products and services, including customizable deal campaigns, credit card payment processing capabilities, and point-of-sale solutions; small cap LiveDeal provides marketing solutions that boost customer awareness and merchant visibility on the Internet by offering a deal engine; and small cap RetailMeNot is the largest digital coupon site in the United States.

What You Need to Know or Be Warned About Coupons.Com Inc 

On March 7th, Coupons.com became the first Silicon Valley tech company to go public for the year when it sold 10.5 million shares at $16 - above its set range of $12 to $14 with shares closing at $30 by the end of the first day of trading. The company raised a total of $168 million with founder/CEO Steven Boal, who founded the company during the dot-com boom of the late 1990s, owing a 9.3% stake while investors Passport Ventures (19.5%) and T. Rowe Price (10.1%) were also left with substantial stakes.

However, Coupons.com is still not profitable as its reported revenues of $167.89M (2013), $112.13M (2012), $91.33M (2011) and $61.41M (2010) for the past four years along with net losses of $11.25M (2013), $59.23M (2012), $22.97M (2011) and $11.89M (2010). The company already had $38.97M in cash covering $63.76M in current liabilities and $66.22M in total liabilities. In other words, Coupons.com is not going to run out of cash any time soon, but the company acknowledged in its IPO filing that "costs and expenses will increase in the foreseeable future" as the company continues to invest in sales and marketing; research and development, including new product development;  technology infrastructure; general administration, including legal and accounting expenses related to our growth and being a public company; efforts to expand into new markets; and strategic opportunities, including commercial relationships and acquisitions.

Among the risk factors cited in the IPO filing, Coupons.com noted that:

We expect competition in digital promotions to continue to increase. The market for digital promotions is highly competitive, fragmented and rapidly changing. We compete against a variety of companies with respect to different aspects of our business… We are subject to potential competition from large, well-established companies which have significantly greater financial, marketing and other resources than we do and have current offerings that may compete with our platform or may choose to offer digital promotions as an add-on to their core business on their own or in partnership with one of our competitors that would directly compete with ours. Many of our larger potential competitors may have the resources to significantly change the nature of the digital promotions industry to their advantage, which could materially disadvantage us. For example, Google, Yahoo!, Bing and Facebook and online retailers such as Amazon have highly trafficked industry platforms which they could leverage to distribute digital coupons or other digital promotions that could negatively affect our business.

Otherwise and for what his opinion might be worth, CNBC's Mad Money host Jim Cramer recently said that he's a buyer when it comes to Coupons.com and that "I'm interested in this one on the pullback."

Share Performance: Coupons.Com Inc vs. GRPN, LIVE & SALE

On Thursday, small cap Coupons.Com rose 1.18% to $27.42 (COUP has a 52 week trading range of $25.75 to $33.00 a share) for a market cap of $1.99 billion plus the stock is down 8.6% for retail investors who got in on late the first day of trading. Here is a look at what long term performance data is available for of Coupons.Com verses Groupon, LiveDeal and RetailMeNot:

As you can see from the above chart, digital coupon or daily deal stocks like Groupon and LiveDeal, which have been around longer, have not exactly been a great deal for investors.

Finally, here is a look at the latest technical charts for all four digital coupon or daily deal stocks:

The Bottom Line. If you must have some kind of digital coupon or daily deal stock in your portfolio, small cap Coupons.Com could be a good deal – when it goes on sale by dropping closer to its IPO price.