money Blue Apron stock tanks following wider-than-expected earnings loss
Yahoo Finance's Brian Sozzi and Brad Smith discuss third-quarter earnings and the stock's performance since its IPO.
Video Transcript
- All right, yeah. We're also watching shares of Blue Apron. They're not sinking.
They're just flat out getting whooped here after the meal delivery service missed estimates for the third quarter and withdrew its previously announced revenue growth target for this year. And [INAUDIBLE], we're talking about, before the show started, why does this company even exist in this environment? They're sending mail-- they're sending food packages to your house that you're still going to probably be hungry after spending an hour and a half to make these packages.
And you look at the financial results here. Net revenue flat year over year, down 11.7% sequentially after a quarter where DoorDash blew it out of the water, only $31 million in cash. They're telling you at the top of this release they're waiting for an investor to come in here and actually give them the money they need to survive.
A disastrous quarter, and I'll also add this. You're going to see a lot of traders. You're going to see a lot of interest investors on the Yahoo Finance platform see the stock at $1.66 here or so and think it's cheap.
It's not cheap because the price is near $1. That is one of the biggest investing myths out there that I continue to hear and get questions about. It's $1.70 stock for a reason. And I would argue it might still be overvalued given the financials of this company.
- It's $1.70 but divided by 15 because they did a--
- --stock split.
- They did a 1 for 15 reverse stock split, and this was back in 2019. That should have told you everything you needed to know about this company and how much they were trying, number one, not to be de-listed-- number two, how the trends were unfavorable for the food delivery landscape. Sunbasket pulling their IPO a couple of years back, also a major indicator. Red flag.
Meal kit delivery perhaps was one of the only bright spots during the pandemic and people being able to get some type of diversified taste by making sure that they were ordering from a HelloFresh or a Sunbasket or a Purple Carrot. Tom Brady, no longer a Purple Carrot friend there. So ultimately, I think we've seen exactly what we've needed to out of Blue Apron to this point.
Of course, the second they made their IPO or have made it known that they were going public, Whole Foods was acquired by Amazon. That put a major dampener effect on Blue Apron getting out the gate. Opened at $10, closed at $10.
That was a warning sign. So all you've had over the course of their life as a publicly traded company is a lot of warning signs. And I mean, we could talk about the customer--
- [INAUDIBLE] I don't know if you were down at the New York Stock Exchange. Speaking of warning signs and the IPO, I was down there covering the IPO.
- It's a lot of stuff outside happened.
- They created a farm. There was a farm. I think they created a wall, a giant wall.
And I'll ask Jared Blikre about this. I'm sure he may have been down there. You can't see. He's off the camera onto the side there. A wall of cabbage-- it was ridiculous.
- I remember it.
- Totally over the top, totally absurd. They created a farm in the middle of the New York-- right out front of the New York Stock Exchange I still to this day I've never seen anything like this before.
- Just so we can put some numbers on this so it doesn't just seem like we're bashing Blue Apron, the customers are also moving away from Blue Apron here too. You've got 323,000 net customers as of the end of this quarter. That number last quarter, 349,000.
And that was essentially stalled year over year where it was 350,000 at the end of last year's comparable quarter for the September quarter, if you will. And so with that, in mind, I mean, you're continuing to see the average order per customer go down. The average revenue per customer, OK, that might be going up. But you've got a smaller base that you're operating on too. So, all of those just adding further context to the struggle.
- I'm renaming this company. It's Dirty Apron, Brad. It's Dirty Apron.
- Oh boy.
- Yep.
- All right.
