Is Blue Apron's current valuation justified?
As of Friday (11/3/17) Blue Apron's (APRN) market cap was $720.3 million. Morning-star puts Blue Apron's TTM revenues at $904 million. Implying that the company is currently trading at ~$183.7 million below it's TTM sales.
Suggesting that the market puts less value on each dollar of sales for Blue Apron. Look at Blue Apron's P/S ratio, it is only at 0.8, ~71% below the industry average (2.8) and ~64% below that of the S&P 500. On these metrics alone, there is a case to be made about its current valuation not fairly reflecting the company's future prospects.
In addition, on a relative valuation basis, Blue Apron valuation stands out. One of Blue Apron's largest competitors HelloFresh, went public on November 2nd in Germany. HelloFresh valuation exceeded $1.6 billion dollars, more than twice Blue Apron's current market capitalization. HelloFresh's revenues last quarter stood at $253.43 million versus Blue Apron at $238.06 million, net losses were -$31.63 million for Blue Apron and -$24.89 million for HelloFresh. Therefore, based on last quarter results, our current valuations suggests that we are giving HelloFresh more than $700 million extra in valuation for having $14.54 million more in revenues and losing $6.74 million less than Blue Apron. Implying that we are either overvaluing HelloFresh or extremely undervaluing Blue Apron.
