Ahead of Blue Apron’s (APRN) second-quarter results release, slated for August 2, 80% of the 15 analysts covering the stock recommend “hold,” and 20% recommend “buy.” Their average target price for the stock is $3.90, which reflects a 25.8% upside to its July 25 price, and they haven’t revised their target prices in the past 30 days.
Challenges and opportunities for Blue Apron
Stiff competition from big and small players remains a concern for Blue Apron. The meal kit arena now includes major players such as Amazon (AMZN), Kroger (KR), and Walmart (WMT), and small players such as Marley Spoon and HelloFresh.
Amazon, particularly since its acquisition of Whole Foods, could be disruptive for meal kit providers. There is also a lot of consolidation going on—Kroger has acquired Home Chef—and speculation that Blue Apron might also be taken over. HelloFresh is reportedly considering selling prepared meals.
Blue Apron accelerated its ad spending in the last week of December 2017, which should help win back customers, and its deal with Costco Wholesale should give its meal kit subscriptions some exposure. The company is also exploring multi-course meals to help customers host parties, and it is adding new offerings. This year, Blue Apron stock has fallen 23.1% to $3.10, 69% lower than its IPO price of $10 on June 29, 2017.