Shares of Blue Apron (NYSE: APRN) were down by over 46% at one point today, as the company announced that it expects its Q3 revenue to land between $109 million and $112 million, much below consensus estimates of just under $130 million. Also, the company announced that it will sell up to $15 million worth of its Class A shares to fund its operations.
Meanwhile, the revenue miss is due to Blue Apron missing out on a $15 million bulk sale from one of its customers. The bulk sale was expected in Q3. If this sale comes in Q4 instead, along with the already-anticipated bulk sale for Q4, they will add up to about $30 million in revenue. These sales are critical for APRN to meet its 2022 revenue target.
Additionally, the equity offering will help Blue Apron meet its obligations for a short period of time, but it needs to raise more money at its current cash burn rate. APRN claims that it is owed over $69 million, and the company stated that if it receives this money, it will have enough funds to operate for the next 12 months. However, if it doesn’t receive this money, its cash will likely only last until Q1 2023. Therefore, investors are worried about the company’s ability to operate, going forward.
Is APRN a Good Stock to Buy, According to Analysts?
Turning to Wall Street, Blue Apron earns a Moderate Buy consensus rating based on two unanimous Buy ratings assigned in the past three months. However, analysts may downgrade their ratings following this news. The average APRN stock price target of $9.50 implies 180.2% upside potential.
