Groupon’s IPO is coming — but how much is it really worth?

It’s been a long and winding road, but Groupon is set to hold its initial public offering on the stock market any day now, with several reports saying the IPO will take place by week’s end.

Here are the facts: The pioneering daily deals website will trade under the ticker symbol “GRPN” on the Nasdaq stock exchange. Groupon has said in regulatory filings it will price its stock between $16 to $18 per share, giving the company a market capitalization of between $10.1 billion to $11.4 billion. Now, reports say that the actual IPO price may be a dollar or two higher than that range, given the strong demand for the stock.

Analysts say: Don’t believe the hype

But some analysts say that Groupon’s financial fundamentals don’t justify such a high valuation. Trefis, a website that calculates company valuations electronically, projects that Groupon is currently worth $7.9 billion, and should have a share price of $12.84 — nothing to sneeze at, of course, but well below both the official and rumored IPO targets. In order to be valued at $11.4 billion with an $18 share price, Trefis says, Groupon will need to grow its North American subscriber base at a much faster rate than it is currently on track to do.

Flesh-and-blood analysts are also skeptical of Groupon’s IPO valuation. Kenneth Sena, an analyst for investment bank Evercore Partners, has pegged Groupon’s central value at $9 billion; Henry Blodget, who had a (somewhat notorious) career as a Wall Street analyst before founding the Business Insider website, has placed Groupon’s central value at $7.5 billion.

First day jitters ahead

None of these estimates will sway Groupon from going public — or, for that matter, stop investors from participating enthusiastically in the IPO. No one denies that Groupon’s stock will get a lot of attention when it first goes public, especially in those first hours of trading. CNBC’s bombastic stock market commentator Jim Cramer said on his TV show last week:

“I think you’d be a fool not to try to get some shares in this deal and take advantage of it, so long as you sell on the spike in the first day. …I think you will get an initial pop, but after that you don’t want to be left holding the bag. So please, do get some shares in the deal. And then get out.”

Of course, Cramer’s record is far from impeccable when it comes to accurately predicting stock market activity. But lots of people out there do watch his show religiously and many of them do heed his advice — so it will be interesting to see just how high Groupon goes once it actually hits the public market.

One thing’s for sure: Groupon’s road to an IPO has been an interesting thing to track so far, and the company’s actual stock market debut promises to be an exciting event as well.

Feature image of Wall Street subway sign courtesy of Flickr user epicharmus.