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Groupon (NASDAQ: GRPN) -- remember Groupon? It's apparently still a thing -- reported earnings last night, and investors are cheering the results. Shares of the online coupon site soared 22.2% through 10:20 a.m. ET Friday after the company missed on earnings, but beat on sales.

The question is why.

Heading into the Q1 2024 report, analysts forecast Groupon would earn $0.05 per share on sales of $121.6 million. As it turned out, sales were better than expected at $123.1 million. Unfortunately, instead of earning a profit, Groupon lost $0.33 per share.

Groupon Q1 earnings

No matter. Investors seem happy that, as new CEO Dusan Senkpyl pointed out, Groupon at least exceeded the high end of its own guidance for Q1 sales. And while Groupon may not have earned a profit, it did at least succeed in cutting the size of last year's $0.95 GAAP loss by about two-thirds.

So there were pluses alongside the minuses.

With revenues growing again (up 1% year over year) for the first time in eight years, Senkpyl declared: "Our business is back on its feet and momentum is in the right direction."

Is Groupon stock a buy?

But there's still a lot of work to be done, as even Senkpyl admits. Growing revenue 1% in Q1 required Groupon to spend 16% more on marketing. Still, by cutting the employee count, Groupon was able to slash selling, general, and administrative costs by 27%, resulting in a smaller loss. And Groupon is making great strides in cash preservation, reducing free cash outflows from $85.8 million in the year-ago quarter to just $13.8 million this time around.

With both profits and free cash flow still negative, I'm not ready to say Groupon stock is a buy just yet. But this ship does appear to be in the process of getting righted. If Groupon's new CEO can return the company to profitability and positive free cash flow this year, as analysts predict he will, Groupon stock could be a viable candidate for a turnaround.

Should you invest $1,000 in Groupon right now?

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.