What’s driving the decline?
Blue Apron Holdings (APRN) stock has fallen 69.2% this year as of November 8. Compared to its IPO price of $10.00 on June 29, 2017, the stock price is down 87.6%.
Blue Apron’s revenue growth has been slowing for quite some time now. Its top line has suffered from the company’s deliberate reduction in marketing investments. Blue Apron is unlikely to see any respite from the declining trend in revenue in the near term.
Blue Apron is slated to report its third-quarter-2018 earnings on November 14. Analysts expect Blue Apron’s revenue to plummet 25.4% to $157.2 million.
Conversely, the company’s bottom line could benefit from ongoing operational efficiency enhancement. Third-quarter adjusted EPS are expected at -$0.21, an improvement from -$0.47 in the corresponding quarter of 2017.
Competition is also weighing on the top line
Increasing competition remains a big concern for Blue Apron. The meal kit arena now has many players, such as HelloFresh and Marley Spoon, as well as big names like Amazon (AMZN) and Kroger (KR). Amazon’s acquisition of Whole Foods could prove disruptive for meal kit providers.
Blue Apron has undertaken quite a few strategies to grow its revenue. It’s focusing on a multi-product, multi-channel strategy to increase the reach of its meal kits. It has already partnered with Costco (COST) and provides meal kits at about 80 Costco locations. In October, Blue Apron collaborated with online food delivery service GrubHub (GRUB) to sell its meal kits on the platform. It also collaborated with Walmart’s (WMT) Jet.com to sell its meal kits on that platform.
What Wall Street says for the stock before the Q3 announcement
Of the 14 analysts covering APRN, 21% have recommended a “buy” and the remainder have recommended a “hold.” Analysts’ 12-month average target price for the company is $2.71, which reflects a 108.4% upside to its stock price as of November 8.