Is Blue Apron Holdings a buy after announcing capital investments and refinancing moves?
Blue Apron Holdings, Inc. (APRN) in New York operates a direct-to-consumer platform that offers original recipes with fresh, seasonal ingredients. It also operates Blue Apron Market, an e-commerce marketplace that provides kitchen tools, utensils, pantry items and other products. APRN shares have fallen 62.3% in the past six months and 50.1% since the start of the year to close the last trading session at $3.36.
The stock, however, recorded significant gains last week. APRN shares jumped after the company announced its capital investment and refinancing movements totaling a planned capital injection of $70.50 million. On May 2, 2022, the company announced its agreement to a new $40 million private placement investment by RJB Partners LLC, a subsidiary of Joseph N. Sanberg and a longtime investor in APRN. She also secured a $500,000 private placement by Blue Apron President and CEO Linda Findley. In addition, APRN announced its intention to refinance its existing debt with $30 million of senior secured notes issued to Allianz Global Investors clients, in order to meet its debt obligations and extend the maturity of its debt until in 2027.
“Proceeds from completed transactions and expected additional debt and equity financing support our continued turnaround as we move toward long-term sustainable and profitable growth,” Findley said. The title gained 11.6% since this announcement.
Here’s what could shape APRN’s performance in the short term:
APRN’s revenues have declined at a CAGR of 10% over the past five years and 11% over the past three years.
For its fiscal first quarter, ended March 31, 2022, the company’s net revenue decreased 9.2% year-over-year to $117.75 million, primarily due to due to a decline in the number of customers and orders, which was partially offset by an increase in its average order. value. Its operating loss rose 173.7% from the previous year’s value to $38.31 million. APRN’s net loss was $38.45 million, reflecting a 144.6% increase over the prior year quarter, while its net loss per share increased 35.2% year-over-year to reach $1.19. Its adjusted EBITDA was negative $30.74 million, compared to negative $6.06 million a year ago, and its free movement of capital was negative $30.12 million, compared to negative $13.70 million in the first quarter of the prior year.
APRN’s EBITDA margin and net income margin of minus 10.40% and 18.79%, respectively, are significantly below industry averages of 12.60% and 5.28%. Its negative leveraged FCF margin of 2.97% is below the industry average of 4.32%.
Besides. the company’s ROE, ROA and ROTC of negative 122.73%, 38.14% and 32.03%, respectively, compare to industry averages of 3.57%, 4.95% and 6.97 %.
The street expects an improvement
Analysts expect the company’s revenue to grow 8.5% in the quarter ending June 30, 2022, 17.5% in the next quarter and 13.2% in the next quarter. fiscal year ending December 31, 2022. The Street expects revenue to reach $134.60 million. in the current quarter. Additionally, the company’s EPS is expected to increase 50% in the current quarter, 38.5% in the quarter ending September 30, 2022 and 41.3% in the current year. However, its EPS is expected to remain negative at least this year.
POWR ratings reflect uncertainty
APRN has an overall C rating, translating to Neutral in our own POWR Rankings system. POWR ratings are calculated by considering 118 separate factors, with each factor weighted to an optimal degree.
The stock has a stability rating of D, which is consistent with its beta of minus 3.42.
APRN has a C rating for Sentiment. Although analysts expect APRN’s financials to improve, its EPS is expected to remain negative, justifying the Sentiment rating.
Among the 72 titles of the Internet industry, APRN is ranked #39.
Beyond what I said above, one can also check out the APRN ratings for quality, growth, momentum, and value. here.
See the highest rated stocks in the internet industry here.
Although the company’s recent capital investments and refinancings have excited investors, its weak financial position is cause for concern. Additionally, increasing competition in the meal kit space could reduce the company’s prospects. Thus, we think it might be wise to wait and see how the company takes advantage of these new funding moves and improves its business before investing in the stock.
How does Blue Apron Holdings, Inc. (APRN) compare to its peers?
Although APRN has an overall POWR rating of C, one might consider taking a look at its industry peers, Yelp Inc. (YAP), which has an A rating (Strong Buy), and trivago NV (TRVG) and Travelzoo (TZOO) that have a B (buy) rating.
Note that TRVG is one of the few stocks hand-picked by our Chief Growth Strategist, Jaimini Desai, currently in the POWR Stocks Under $10 portfolio. Learn more here.
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APRN shares fell $0.13 (-3.87%) in premarket trading on Tuesday. Year-to-date, the APRN is down -50.07%, compared to a -15.91% rise in the benchmark S&P 500 over the same period.
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a master’s degree in economics, she gained knowledge in equity research and portfolio management at Finlatics. After…