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While it might be cool to get a Groupon (NASDAQ:GRPN) discount for its upcoming IPO, that’s probably not going to happen - for good reason, too, since this is likely to be another hot IPO issue. Loyal users rave about the company as if they fear they won’t get another Groupon email tomorrow.

The controversy about the company has only continued to heat up. So what’s all the IPO hype about? Basically, the investment world is torn in half. One camp thinks the company is literally worth less than the free email they send you, but the other camp thinks Groupon is the best since sliced bread.

We do love a great, opinionated debate, but in the case of Groupon, it’s the numbers that best describe the true potential of the firm. According to the firm’s S-1 statement filed with the SEC, the company is on fire in terms of revenue growth. We can already hear the bears screaming about how the firm will never be profitable, but here after checking the firm’s statements, we disagree.

If you think Groupon is all the rage only in the U.S. we have some news for you. Groupon has far bigger plans than just the good ol’ USA. Next in line is LivingSocial, which is trying to unseat the king of daily-deal emails. While Groupon still hasn’t gone public, we still rate it a BUY. We like the firm’s global approach, we believe that profitability is only a matter of time, and we don’t think it’s a zero-sum game with respect to competition from Living Social.

Don’t Be Misled by Numbers at Face Value

Is Groupon unprofitable? It sure is. But does that matter in the long term? Not really. This is all a matter of perception. When we dig into the numbers, we see that the vast majority of losses come from abroad. U.S. operations lost only $10.4 million last year, whereas the international operations lost $170.6 million. So, if the firm is losing a good chunk of change abroad, how can it become profitable? Well for 2010, year-over-year gross profit growth was 24,600 percent, reaching $280 million. In Q12011, the firm already achieved an impressive $270 million. What all this really means to us is that, if Groupon can just improve its expense management more efficiently, it could easily achieve profitability.

Go Global or Fail

One of the most intriguing points about Groupon is its aggressive international expansion. While most firms wouldn’t seriously consider projection abroad until they saturate the domestic market, Groupon broke that protocol. Why is this significant? To be candid, Groupon isn’t the most innovative idea and copycat firms have little barrier to entry. We like that they are cutting off potential competition in lucrative foreign markets before it can even crop up. This allows the firm to geographically diversify its revenue from the recovering U.S. economy. Emerging markets come to mind, anyone? In the simplest terms, “The best defense is an explosive offense.” In a world that is truly globalized, anything less would be very disappointing.

Call to Action

Unfortunately Groupon isn’t going to IPO tomorrow. Will it price high? Potentially – and, again, that’s open to personal interpretation. Regardless, we think Groupon could be a great name to buy even if it comes out on the high end. Why? The firm’s service is slowly becoming part of people’s everyday lives and this means it has disruptive potential. Not to mention it looks like this firm took a page right out of OpenTable’s (NASDAQ:OPEN) successful playbook by offering a small share float and we know how that story ended for investors who weren't greedy. In the meantime, for those interested in a speculative tech firm with a huge amount of potential, it’s time to start saving those pennies for some risk capital that can be deployed on Groupon.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Groupon Profitability Is Only a Matter of Time