Sell-Side Reheats Blue Apron IPO - Dealbreaker

Sell-Side Reheats Blue Apron IPO

Goldman and friends have some leftovers for you.

Remember when the unquenchable excitement behind Blue Apron's much-awaited IPO sent the company's shares to a blazing debut? Of course you don't, because that never happened. The stock ended day one essentially where it started, and it's been downhill from there. As it turns out, the whole overpriced-meal-in-a-box thing is about as appetizing to investors as it is to customers, and, well, maybe that's as it should be.


But one should never forget the sell-side. On Monday, 11 bank analysts burst out of the gate with new recommendations on APRN. Seven of them were positive. Here's a taste:

"Blue Apron is the leading player in the nascent meal-kit delivery market and addressing a large, multi-billion dollar market," said Mark Mahaney, an analyst at RBC Capital Markets who has a $10 price target on the stock. Goldman Sachs, an IPO underwriter, also had a buy rating on the stock with an $11 price target.

Never mind the fact that Blue Apron relies on a finite stream of new customers to compensate for a massive attrition problem. Never mind that the company's growth in marketing costs has exceeded revenue growth in each of the past three quarters. Never mind the, uh, lack of profits. Look at the ratings, baby!

Accordingly, APRN shares went vertical:

Screen Shot 2017-07-24 at 2.34.35 PM

Which of course looks a bit less impressive when you zoom out a bit:

Screen Shot 2017-07-24 at 2.36.44 PM

If this is all giving you flashbacks of another overhyped and profitless tech startup trembling under the looming shadow of a FANG as big-name underwriters pretend there's nothing at all to worry about – well, Snap out of it. This is all just part of the song and dance we're obligated to perform over the agonizing and hopefully brief period that every new startup gets between VC Appreciation Day (aka IPO) and The Bezos Event (acquisition or otherwise).

So keep dancing.

Blue Apron just got a flood of bullish ratings from Wall Street, and its shares are flying [BI]