Wall Street Whiffs On Blue Apron's First Quarterly Earnings Report

Things keep going from bad to worse for one of the most disastrous Wall Street IPOs in recent history. On Thursday, Blue Apron Holdings Inc APRN released its first quarterly earnings report since its June IPO, and the company revealed a much larger loss than Wall Street was expecting.

The Numbers

The company reported an earnings per share loss of 47 cents compared to consensus analyst forecasts of a 30 cents per-share loss. The silver lining for Blue Apron is that the company managed a modest revenue beat on the quarter, reporting $238.1 million in revenue compared to consensus forecasts of $235.8 million.

Perhaps the most disappointing number for Blue Apron bulls was a 9-percent quarterly decline in customers, which management attributed to a reduction in marketing expenses.

Blue Apron shares tanked more than 16 percent on Thursday morning and are now trading more than 48 percent below their $10 IPO price.

Related Link: Blue Apron Jumps To The Top Of Short-Seller Favorites List

Short Sellers Pile On

Short sellers likely saw nothing out of Blue Apron to threaten their bearish outlook got the company. As of mid-July, Blue Apron was at the top of the list of most popular stocks among short sellers, according to FIS Astec Analytics. Short sellers have consistently snatched up nearly all available shares of Blue Apron in recent weeks.

With Blue Apron poised for potentially yet another day of double-digit losses Thursday, there appears to be a wide gap between how Wall Street analysts view Blue Apron and how the market does. Prior to the company’s earnings report, there were seven analysts covering Blue Apron stock. Those analysts accounted for a total for five Buy ratings, two Hold ratings and not a single Sell rating. Their average price target of $10 per share represents roughly 90 percent upside from the stock’s current price of around $5.30.

What Is Wall Street Thinking?

RBC Capital analyst Mark Mahaney is one of the analysts covering Blue Apron that has whiffed on the stock thus far. “In 2018, we believe the company can re-accelerate Revenue and deliver top line growth of 30%+ driven by an expanded product offering, Blue Apron’s leadership position in the market and the secular trend of the U.S. grocery industry moving online,” he wrote on Tuesday while reiterating his Overweight rating and $10 price target for Blue Apron (see Mahaney's track record here).

While Blue Apron bulls likely take comfort in Wall Street’s bullish take on the stock, bears see it providing plenty of opportunity for downgrades and price target cuts if the company continues to underperform.

At time of publication, shares of Blue Apron were down 15.22 percent at $5.29.

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Image Credit: By Louise.ward (Own work) [CC BY-SA 4.0 (http://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons