Online Coupon Codes Are Hot, and Investors Are Cashing In

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www.coupons.com
Here's a tip that every seasoned Internet user knows all too well: The next time that you find yourself looking at a checkout screen with a blank box begging for a coupon code, open a new tab or window and find one. It doesn't matter if you're shopping for a Michael Kors handbag or squaring away a delivery order for a large pizza. If there's an active online code out there to be had, you can probably find it at one of the many aggregation websites.

The awkwardly titled RetailMeNot (SALE) operates the world's largest marketplace for digital offers. It attracted 155.2 million visits during the first three months of the year, with a growing number of those users checking in on mobile devices.

Coupons.com (COUP) is no slouch, either. It's a leading promotion platform that connects brands and retailers with shoppers through its digital coupons. Coupons.com distributed 407.8 million digital printable and paperless coupons during the first quarter.

Using the Internet to scour for bargains is growing more popular with every quarter. That's good news for savers, but it's also potentially better news for investors.

A Close Save

RetailMeNot and Coupons.com posted strong growth in their latest quarterly results last week. The spurts were impressive.

The 155.2 million visits that RetailMeNot attracted is a 26 percent advance over the past year, and it revenue surged 51 percent to $61.3 million.

Investors saw the same trend at Coupons.com. The 407.8 million digital coupons it distributed during the first quarter made a healthy 30 percent year-over-year improvement, and revenue clocked in 41 percent higher to hit $51.5 million.

Celebrating the Rookie Class

RetailMeNot and Coupons.com are growing in popularity as destinations for thrifty consumers, but you're not alone if you didn't know that one or both trade publicly.

That wasn't the case a year ago, as RetailMeNot went public at $21 this past July. Coupons.com went public at $16 just two months ago.

RetailMeNot has lived up to the hype. It has now beaten Wall Street's profit targets in each of its first four quarters as a public company. The stock has corrected sharply since peaking three months ago, but it's still trading well above last summer's initial public offering. Coupons.com naturally only has last week's report on its post-IPO track record, but it impressed the market by posting a small profit when analysts were bracing for a quarterly deficit.

Success should continue for both companies. Consumers are getting more Web-savvy, and RetailMeNot and Coupons.com are benefiting form the network effect that claims that shoppers will go where buyers go and vice versa. We're seeing it at Coupons.com with its publishing network that is now 30,000 publishers strong. We're also seeing it at RetailMeNot, where the number of global subscribers to either its newsletter or a store alert has more than doubled to 20.4 million over the past year. Its apps across several countries were downloaded 16.3 million times during the quarter.

These numbers attract savers and the companies looking to sell to them. As an aggregator, RetailMeNot relies on its growing user base to validate posted coupon codes and companies paying up to play a part in the deal promotion process. Coupons.com generally works with the brands to spread the word.

Coupons.com sees revenue clocking in between $217 million and $223 million this year. That's at least 29 percent growth off of the $167.9 million that it recorded last year. Analysts see RetailMeNot's top line climbing 35 percent this year to $282.4 million.

There are savings to be had, and for investors this means that there are stock gains to be generated.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends RetailMeNot.


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14 Comments

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georgettec28

I used to get most of my coupons from teh Sunday newspaper. No more. Coupons.com provides so much more and they are now my number one source for grocery coupons. I also use livingrichwithcoupons.com for great advice on deals plus coupons.

May 23 2014 at 5:33 PM Report abuse rate up rate down Reply
bigred8690

I was at a Belk store looking at Izod pants but I had to lose some weight first (the way to stay thin is to NEVER buy new clothes to fit your fat a**). I asked the lady how long does the sale last, and she said it doesn't. They're always marked down.

May 15 2014 at 1:42 AM Report abuse rate up rate down Reply
elpmlp

So even in cyberspace there's a sucker born every second. These so-called mega coupon websites are modern technological bait and switch artists. Shame on them and those who propel them into hundreds of millions of dollars of revenue.

Just remember the bigger they are, the harder they'll fall!

May 15 2014 at 1:30 AM Report abuse +1 rate up rate down Reply
teddyinfl

interesting article -- we have the owned the coupon related domain name Savepon.com for many years and we may be interested in getting the highest and best use from our Savepon.com ???

May 14 2014 at 10:16 PM Report abuse -1 rate up rate down Reply
wlh1923

Doing a google search for an "aggregation web site" (whatever the f that is) to hunt down a coupon when I'm getting a pizza on a Friday night isn't hot and I'm not cashing in. Sorry.

May 14 2014 at 9:51 PM Report abuse rate up rate down Reply
Paul Danza

I tried retail me NOT in Staples. As I was passing Staples, my phone alerted me of the $5.00 off any purchase. I read the savings offer and seen that it was valid on that day. I immediately turned in and parked, shopped for something I needed and presented the phone with the scanner code to the cashier. After it had failed, she told me that her computer cash register determined that the code had already been used. I was of course embarrassed to no end. After telling the sales girl that I had just received the coupon and hadn't used it yet. She tried again and the same results, no $5.00 savings. Full price paid and a lecture from the sales girl that this happens to them all day every day when customers present the retail me not coupon codes to them. After the embarrassing moment, I hit the delete key on the app and the big savings I got was no more wasting time or embarrassing moments to try to save a buck.

May 14 2014 at 8:13 PM Report abuse rate up rate down Reply
1 reply to Paul Danza's comment
wlh1923

Not to mention all the embarrassing time you wasted relating your pathetic story about trying to save $5.00 by buying something you didn't need - just to save $5.00 because you thought you had a $5.00 coupon.

May 14 2014 at 9:50 PM Report abuse -1 rate up rate down Reply
1 reply to wlh1923's comment
SR25MK4

wlh1923 ... Are you BLIND...Or just a stupid smart-a$$? Paul Danza - QUOTE,"... I immediately turned in and parked, shopped for something I needed..." If you can't bother to read a post before YOU post a PATHETIC reply...
Must I state the obvious?

May 14 2014 at 10:09 PM Report abuse -1 rate up rate down
Tanya

my daughter passed away may 23, 2013 thank you all for thinking about her I'm her mother so thanks again

May 14 2014 at 2:01 PM Report abuse rate up rate down Reply
Brian Sarrels

Seems just like another BAIT & SWITCH to me.

May 14 2014 at 11:19 AM Report abuse rate up rate down Reply
ssfiske

I have used retailmenot quite a few times - sometimes it saves me $ but other times it doesn't (i.e. retailmenot will offer 15% off but to use it they will direct you to their link to the site where the prices are actually higher than going directly to the sellers website initially. It works out to be no different financially). Sometimes retailmenot has coupons to bring to stores but those most of the time do NOT work. The stores cannot recognize their code (I've tried and failed at a bath shop, Macy, Sears, SoupPlantation). My advise is to still try visiting the site first but don't get your expectations set too high.

May 14 2014 at 11:14 AM Report abuse +1 rate up rate down Reply
muffinyourface

secret to finding coupon code? What kind of title is that for an article that just talks about how well two coupon sites/apps are doing? I was reading wait to see how to find these coupon codes, i guess just search retail me not or coupons.com

Poor article and deceiving title.
I would expect this from yahoo not aol.

May 14 2014 at 9:47 AM Report abuse +4 rate up rate down Reply