Groupon Inc (NASDAQ:GRPN) is another cautionary tale about red-hot IPOs. For the most part, it can be tough to keep up the momentum. Back in 2011, GRPN reached an all-time high of $26. But the good times would not last long — Groupon stock is now trading around a lowly $3.45.

But of course, the company has been working hard to get back on track. To this end, Rich Williams came on board as CEO in late 2015 and he has certainly not wasted any time in making fundamental changes.

For example, by April the following year, he struck a deal for a $250 million investment from Atairos. The deal also involved Comcast Corporation (NASDAQ:CMCSA), which agreed to “work with Groupon to identify and implement potential strategic partnership opportunities.”

Yet turnarounds can be tricky — and GRPN is no exception. But perhaps there may ultimately be an opportunity here? Well, to see, let’s take a look at three pros and cons:

Groupon Stock Pros

Customer Growth: In the latest quarter, the company added 1.2 million new customers in North America alone, which was the biggest increase in three years. The overall base is now at over 29 million. And on a global base, it is more than 50 million.

The recent acquisition of LivingSocial will further bolster the count by about 1 million. The company, which had the backing of Amazon.com, Inc. (NASDAQ:AMZN), was valued at about $6 billion in 2011. But GRPN was able to buy the operation for an “immaterial” amount.

Groupon has been working hard to improve its customer acquisition strategies as well, which involve a combination of digital and traditional approaches. But more importantly, the company is focused on those customers that produce attractive return on investments. GRPN has seen profits within 12 to 18 month time periods.

Restructuring: It has been wrenching — Groupon has been transitioning from a daily deals site to a marketplace, although there continues to be a major focus on promotions and discounts.

Something else: During the past year, GRPN has reduced its country footprint from 47 to 26. No doubt, this has greatly simplified the operations, but also helped lower the cost structure. In fact, GRPN can now act more quickly when it comes to introducing new features or products.

But the restructuring efforts are not done yet — the company has the goal of getting to just 15 countries.

Buyout Bait: Groupon stock certainly has attractive assets for a potential suitor. They include a high revenue base ($2.2 billion for the past 9 months), a sophisticated online marketing platform and a large mobile footprint, with nearly 140 million downloads.

The valuation on GRPN stock is also fairly cheap. Consider that the price-to-sales ratio is a mere 0.63X.

So who may be interested in buying Groupon? Well, perhaps the most likely prospect is Alibaba Group Holding Ltd (NYSE:BABA). A deal would instantly give it a nice presence in the lucrative U.S. market. What’s more, BABA already has a 5.6% stake in GRPN.

Groupon Stock Cons

Financials: They remains very sluggish. In fact, on news of the latest quarterly report, GRPN stock plunged 22%.

On the face of it, the results were not necessarily bad, with revenues increasing by 1% to $720.5 million and operating cash flows coming to $78.9 million. Yet the real concern was the gross billings, which fell by 2%. It’s an unnerving sign that it could take some time for the company to get to sustainable growth. Let’s face it, by withdrawing from a large number of foreign markets, it is natural for there to be volatility on the top-line.

Competition: It’s intense. Of course, the main threat is from AMZN, which is the dominant player in the e-commerce space. The company also has some inherent advantages, such as the Prime service and the Kindle system. And the cloud segment continues to provide lush profits, which allows AMZN to maintain low prices.

Yet there are other threats like Facebook Inc (NASDAQ:FB) and Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL). These operators have been leveraging their enormous platforms to get a bigger piece of the e-commerce opportunity.

Finally, even traditional brick-and-mortar companies are getting much more serious. Perhaps the most notable is Wal-Mart Stores Inc (NYSE:WMT), whose Jet.com business could put pressure on GRPN stock.

Brand: Groupon stock is still associated with its original daily deals business. In other words, it will continue to be tough to transform the brand — essentially creating a new identity.

So going forward, there could easily be challenges with attracting new customers to the marketplace. As noted in the GRPN 10-K: “If any of our assumptions regarding our marketing activities and strategies prove incorrect, our ability to generate profits from our investments may be less than we anticipated. In such case, we may need to increase expenditures or otherwise alter our strategy and our results of operations could be negatively impacted.”

Bottom Line on GRPN Stock

If anything, it is a testament to GRPN that the business still has lots of scale. After all, most of the daily-deals operators are no longer around!

But the transition has not been easy. As a result, the Groupon stock price has seen lots of volatility. Granted, there is potential for a buyout, but betting on such an outcome can be dicey.

So then, should you buy shares in GRPN stock? Not now. It’s better to wait until there are more signs that the restructuring is working.

Tom Taulli runs the InvestorPlace blog IPO Playbook and is a registered investment adviser representative (you can visit his site to learn more about his financial planning services). He is also the author of various books on investing like All About Commodities, All About Short Selling and High-Profit IPO Strategies. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.