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What Analysts Are Saying about Blue Apron after 1Q18 Results

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Rating synopsis

Following Blue Apron’s (APRN) announcement of its 1Q18 results on May 3, most of the analysts covering the stock maintained a “hold” rating. Of those 16 analysts, 75% recommended a “hold,” and 25% recommended a “buy.” None of them recommended a “sell.”

After Blue Apron’s 1Q18 earnings announcement, Morgan Stanley cut its price target to $2 from $4.50 projected earlier. There could be more price revisions in the coming days.

Currently, analysts’ 12-month average target price for the company is $4.05, which reflects a 76.1% upside to the price of the stock on May 3.

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Snapshot of 1Q18 results

Blue Apron’s adjusted loss per share was $0.17 in 1Q18, which was below analysts’ estimate of a $0.24 loss per share.

Sales of $196.7 million missed analysts’ estimate of $197.3 million. On a YoY (year-over-year) basis, net revenue declined 20% since the company intentionally reduced its marketing spending. Net revenue grew 5% from 4Q17.

The company has been witnessing a shrinking consumer base due to lower marketing spending. However, with the reacceleration of marketing spending, the company expects its customer base to get a boost. To attract more customers, it has signed up with Costco Wholesale (COST) and is also working on developing a special occasion box to help customers with parties.

As result of its ongoing restructuring, Blue Apron expects its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) to break even in 2019. It has reiterated the chances of its adjusted EBITDA breaking even in 4Q18, given its restructuring initiatives.

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