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How Blue Apron Stock Reacted to Its 4Q17 Results

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APRN stock unchanged after its 4Q17 results

Blue Apron Holdings (APRN) posted its 4Q17 results on February 13, 2018. The meal kit delivery pioneer posted a loss of $0.20 per share, which was narrower than analysts’ estimate of a loss of $0.27 per share. The company’s net revenues of $187.7 million in 4Q17 topped analysts’ expectations of $185.1 million.

Blue Apron announced that with the help of ongoing organizational restructuring, its adjusted EBITDA[1. earnings before interest, tax, depreciation, and amortization] could break even as early as 4Q18. The company previously set a target of achieving its break-even adjusted EBITDA in 2019 along with a double-digit increase in revenues.

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Although Blue Apron’s (APRN) stock price was unchanged following its earnings release results on February 13, it rose 3.6% to close at $3.47 on February 14, 2018. Its stock has lost 65.0% of its value as of February 14, 2018, compared with its IPO price of $10.00. The company commenced trading on June 29, 2017.

Wall Street’s concerns

The increasing competition in the meal kit market has caught the attention of investors and analysts. The meal kit delivery market is becoming crowded with players like Marley Spoon, HelloFresh, and Sun Basket. Amazon (AMZN) and Walmart (WMT) are working on expanding their presence in this space.

On the other hand, Blue Apron’s revenue growth and its customer base are decelerating rapidly. The company’s net revenues for 2017 grew 10.8% compared with 133.4% and 338.0% growth reported in 2016 and 2015, respectively.

The company’s customer base stood at 746,000 at the end of 2017 compared with 879,000 customers on December 31, 2016. The company cited the reduction in marketing spending to speed up its operations at its Linden, New Jersey, fulfillment center as the reason behind the loss of customers.

Series overview

In this series, we’ll discuss Blue Apron’s 4Q17 results and its revenue growth strategy. We’ll also explore the changes in Wall Street analysts’ ratings following the company’s earnings announcement.

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