First, the delivery service has proven to work well for many different companies, but with Amazon entering the food business, it could prove to be detrimental to Blue Apron. The reason for this is while both have the infrastructure in place to deliver items, Amazon would appear to have more robust operation and this could outperform Blue Apron, pressuring their business and their revenue.
Secondly, food such as this needs to be delivered quickly as it contains fresh ingredients that may not sustain long outside of a climate controlled environment. Think about it, you come home in the middle of summer only to have your food sitting on your front porch in the blistering sun. This could prove to be a hinder to their business, but the fact they are going public means they have confidence in their customer base.
Lastly, the idea of people purchasing meal preps is not as mainstream as it could be, leaving plenty of room to grow if the company is able to execute. As a potential investor, having opportunity for growth is key because you want to enter the investment early and be able to ride that wave. Be careful though as stated earlier, competition is intense and there are still many obstacles to overcome before becoming a household name.
Seeing their IPO price get reduced could be a warning sign or a value investment opportunity. At this point in time, they do not have an public financials so it is difficult to complete a in depth fundamental analysis, but you can still get a good read by attempting to look at other companies who are exposed or play in the same space. Right now, you should keep a watchful eye on the company as well as the competition because it is about to become extremely competitive now that Amazon is entering the market. They have money and fire power behind them and they have shown they are not afraid to use it.
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Try AI Portfolio ArchitectNathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
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