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Groupon: Dead as You Know It (Update 2)

The company is still generating cash, though operating cash flow decreased 35% year over year to $42.1 million. As of the end of the quarter, the company had $1.2 billion in cash and cash equivalents. Groupon may use up a significant portion of this cash, as it transitions its business model from daily deals to goods.

Credit Suisse analyst Stephen Ju echoed the thoughts of Stifel's Rohan on investor worries as Groupon pivots its business model.

"We believe investor concern will continue to ensue given the company's short-term decision to prioritize growth in the far lower margin goods business, without clarity as to when growth will return to the higher margin daily deals business," Ju wrote in his research report. He has a neutral rating on Groupon shares with a $6.50 price target.

Groupon is clearly in a state of flux as it tries to recapture some of the luster it lost after accounting problems were uncovered in late April.

Hudson Square analyst Dan Ernst downgraded shares as the aggressive push of the goods segments potentially creates problems with its merchants. He also sees the goods business causing operating risks, as well as lower margins. Ernst lowered his rating to hold yet kept his $12 price target intact.

Investors looking to bet on a successful turnaround certainly won't need a "Groupon" when buying shares. Not at these levels, and perhaps not ever.

Interested in more on Groupon? See TheStreet Ratings' report card for this stock.

-- Written by Chris Ciaccia in New York

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