The first area Blue Apron is going to struggle with is the amount of cash they can spend compared to Amazon. Amazon has the backing of investors and the ability to sell and create anything with success it seems. What this means if you are a potential investor is that you need to now where Blue Aprons dollars are going and if they are strategic enough. There is enough room for both of them but you should consider Amazon the bully in this situation.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Blue Apron income statement, its balance sheet, and the statement of cash flows. Potential Blue Apron investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Blue Apron investors may use each financial statement separately, they are all related. The changes in Blue Apron's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Blue Apron's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Blue Apron
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Blue Apron performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Blue Apron shares is the value that is considered the true value of the share. If
the intrinsic value of Blue is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Blue Apron. Please read more on our
fundamental analysis page.
How important is Blue Apron's Liquidity
Blue Apron
financial leverage refers to using borrowed capital as a funding source to finance Blue Apron Holdings, ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Blue Apron financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Blue Apron's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Blue Apron's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Blue Apron's total debt and its cash.
A Deeper Perspective
Secondly, Blue Apron is going to have to watch out for the brand image game. Amazon is recognizable anywhere and everyone for the most part trusts Amazon and their brand. Compare that with Blue Apron, I bet if you asked people, less of them are going to know much about them despite what they hear in the news. Again, just like the cash flow Blue Apron can become a niche brand that everyone trusts as the expert, but they are going to have to prove it against this giant.
Lastly, Blue Apron are going to have to keep their investors relaxed during this time because any normal investor has this at the front of their issue list. It is almost certain that it will be addressed in the conference calls so be sure to listen close to those, but right now Blue Apron is ahead of Amazon but we are unsure how long that will last.
Blue Apron certainly has the ability to become a leader as they only focus on this market whereas Amazon focuses on multiple markets. It will be interesting to see how the market shakes out with this because it feels like a budding industry that a few others could join. We all see this in different shapes from razors to dog toys, the home delivery service has exploded and I think it is here to stay. Blue Apron has only been on the public market for a short while and with that, take time to complete a due diligence on the company and narrow in on their advantages over the Amazons of the world.
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Nathan 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.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Blue Apron Holdings,. Please refer to our
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