If you’re a retail investor, you should know what’s been happening in the sector as of late. On Monday, Blue Apron’s stock (NYSE:$APRN) increased by 12% after analysts gave a thumbs up for its prospects.
As of July 24, seven of the 12 analysts covering the meal kit delivery service have a positive rating on the stock, which is trading at $7.34. Despite the increase, Blue Apron’s stock still has an upward climb ahead, as it is trading below its initial public offering price of $10. RBC Capital, Oppenheimer (NYSE:OPY), and Goldman Sachs (NYSE:$GS) all have “Buy” ratings on Blue Apron’s stock.
So what caused the rising expenses and slowing growth in the near term? Well, according to analyst Terry Heath from Goldman Sachs, it was caused by prevalent “hypercompetition.” Heath added that Blue Apron will maintain “its lead in a larger category with more rational economics.” It has been known for a while that Blue Apron’s customer acquisition costs are pretty out there; in fact, even as revenue increased, Blue Apron still spent $178 million in the year ending on March 31, 2017, to acquire new customers.
After debuting in the stock market almost a month ago, Blue Apron’s shares bombed on news reports that Amazon (NASDAQ:$AMZN) was starting to test meal delivery kits. However, RBC Capital’s Mark Mahaney, who has a Buy rating on Blue Apron’s stock, has said that Blue Apron was a “clear leader” in the United States market. Additionally, Jason Helfstein from Oppenheimer stated that Amazon could remain an “overhang” on Blue Apron’s success.
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