APRN - Why I Would Avoid Blue Apron Stock Despite Its 'Cheap' Appearance
With a stock price of $2.44 and a market cap of just under $85 million, Blue Apron (NYSE: APRN) has fallen to penny stock status -- a far cry from the $1.9 billion it was worth when it went public in 2017. But the situation could get even worse for the embattled meal kit company. Let's discuss why investors should stay away from this money-losing business.
The term "economic moat" refers to a business's ability to maintain a competitive advantage over rivals in the same industry. This is key to a company's success because it enables it to sustain healthy market share and profit margins over the long term. Unfortunately, Blue Apron has been unable to achieve this, despite being an early leader in the online delivery meal kit niche.
At the time of its initial public offering (IPO) in 2017, Blue Apron enjoyed a 40% share of the U.S. online meal kit industry, compared to its closet rival, Hello Fresh , which only had a 28% share at the time (according to data from Vox). But by 2020, Blue Apron's market share had collapsed to just 9%, while Hello Fresh grew its share to 69% over the same period.
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Why I Would Avoid Blue Apron Stock Despite Its 'Cheap' Appearance