Following Blue Apron’s (APRN) announcement of its 4Q17 results on February 13, 2018, a majority of the analysts covering its stock maintained a “hold” rating. On February 14, 2018, of the 16 analysts covering the stock, 69% recommended a “hold,” 25% recommended a “buy,” and 6% recommended a “sell.”
In 4Q17, Blue Apron’s loss of $0.20 per share came in narrower than the analysts’ estimate of $0.27. Its net revenues of $187.7 million also topped the analysts’ estimate of $185.1 million. Strong cost management and increasing operational effectiveness boosted its results.
However, APRN’s net revenues fell 13.0% from 4Q16, primarily due to a decreased number of customers and orders. The company slashed its marketing spending to focus on improving the operations of its Linden, New Jersey, fulfillment center.
However, the company stepped up its marketing efforts in the last week of December 2017, which are expected to boost its customers and orders in 1Q18. However, the increasing competition in the space has emerged as a major concern.
Following these results, SunTrust Robinson raised its price target for Blue Apron to $4.50 from $4.00 projected earlier. However, Citigroup cut its price target to $4.00 from $4.30 estimated earlier.
Also, Stifel and Morgan Stanley cut their target prices to $4.00 and $4.50 from $6.00 and $4.70, respectively. Canaccord Genuity slashed its price target to $8.00 from $10.00 projected earlier. We can expect more price revisions going forward.
Currently, the analysts’ 12-month average target price for the company is $4.82, which reflects a 38.9% upside to APRN’s stock price as of February 14, 2018.