In 1Q17, both companies posted approximately ~1 million customers. Source: Estimates from Contributor Model, Historical data from Investor Relations
Source: Blue Apron: Possible Bankruptcy And How To Trade The Next Earnings Call In fact, a failure to fully appraise the idiosyncratic risks that encumber Blue Apron and its ability to deliver viable competition has been one of the greatest follies of speculators betting on the meal-kit category in 2020. While it is an equitable appraisal from a competitive standpoint, the two companies have vastly divergent operating models and tertiary factors contributing to said disparity. Blue Apron)īlue Apron and HelloFresh are often the subjects of comparison by industry commentators and market speculators. The company offers meals that cater to a number of diets, lifestyles, and offers regionally available auxiliary services including a wine subscription in the United States. Similar to Blue Apron ( APRN), HelloFresh delivers curated boxes of ingredients accompanied by recipe cards with an estimated cook time of 30-40 min. In 2017, the company debuted on the Frankfurt Stock Exchange at a valuation of ~$2 B. HelloFresh expanded to the Netherlands, UK, US, and Australian by 2012 and delivered over 1 million meals by 2014. Initially, the founders hand-packed and delivered the packages to their customers.
The company was founded in 2011 by Dominik Richter, Thomas Griesel, and Jessica Nilsson in Berlin, Germany as one of the earliest entrants to the meal-kit category. In my view, HelloFresh is not only the best of breed investment in the meal-kit category but its relatively low valuation relative to superior trailing and forward growth rates also make this a top long idea from a GARP and growth perspective. I attribute this benefit primarily to the company's global operating position that enables superior economies of scale, thus allowing a greater focus on customer satisfaction and non-financial growth. In addition to this happy-medium of best-of-class top-line growth and stable profitability, HelloFresh has also exhibited consistent net customer gains on both a y/y and sequential basis and operates with an ample balance of cash & equivalents to cover all debt obligations two-times over.
This is largely attributable to the company's long-term upward trend in margin expansion, which saw a point of inflection to profitability in 2H19 and was further exacerbated by the Covid-19 crisis causing a global pull-forward in adoption. HelloFresh SE ( OTCPK:HLFFF) has been a quiet powerhouse in equity markets YTD with share price appreciation in excess of 270%. Exhibit 1: HelloFresh SE YTD (US Foreign OTC)
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