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Blue Apron vs. Snap: Which IPO Has Been Worse So Far?
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Shares of both Snap Inc. (SNAP - Free Report) and Blue Apron have had a rough go of it since their respective highly-publicized IPOs earlier this year, and confidence in the companies’ futures seems to be slipping every day. But which IPO has been worse so far? We’ll have to take a closer look.
How to Judge
Blue Apron and Snap are far from industry competitors, so an investor interested in buying or selling their stocks would likely look at different metrics to make that determination for each. However, with any newly-public company, there are several key metrics for determining the success of the IPO.
In this case, we’ll be taking a look at the difference between private valuations and current market caps, share price performance since the market debuts, and Zacks exclusive metrics in order to make our determination.
Private Valuations vs. Current Market Caps
One method for determining the performance of a company after its IPO is to track the change in its valuation. Different investors will make different arguments about the effectiveness of private valuations and public market caps for determining a company’s worth, but comparing the two should give us an interesting snapshot on the change in how the markets perceive these brands.
After its latest round of funding, Snap hit a pre-IPO peak valuation of about $25 billion. Based on today’s price, Snap’s current market cap sits at $15.35 billion, meaning that the company has shed nearly 40% of its value in the few months since its early-March IPO.
On the other hand, Blue Apron earned a private valuation of about $2.5 billion. Its market cap is currently sitting just above $1 billion, which represents a 60% drop from its pre-IPO level.
In the battle of who's worse, Blue Apron gets the slight nod in this category.
Share Price Performance
Of course, we ought to look at share price performance as well. Let’s remember that Snap priced its IPO at $17 per share, and shortly after its debut, the stock soared to a high of $29.44. However, those levels didn’t last long, and Snap has been steadily falling since then.
In fact, Snap hit a new all-time low of $11.28 per share on Monday morning. That represents a staggering 33.6% drop from its IPO price.
Nevertheless, things have been worse for Blue Apron. Even before its debut, the company was forced to lower its IPO price from a range of $15 to $17, eventually landing on $10 per share for its initial price.
Last week, Blue Apron hit a new all-time low of $5.00 per share, which represents a 50% slump from its IPO price. Again, the struggling meal-kit delivery company gets the unwanted edge in this category.
Zacks Metrics
Currently, Snap is sporting a Zacks Rank #4 (Sell), as well as an “F” grade for Value and an overall VGM grade of “D.” Blue Apron has a Zacks Rank #3 (Hold) with an “F” grade for Momentum and overall VGM grade of “D.”
While these metrics don’t spell well for either company's’ fundamental picture, Snap gets the “who’s worse” edge for its weaker Zacks Rank and negative earnings estimate revision snapshot.
Bottom Line
Blue Apron is worse in two of our self-defined categories, but Snap’s weak Zacks Rank could imply that its near-term outlook is worse. Either way, it’s been a headache to own either of these stocks so far, and investors will hope that the companies can turn things around soon.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
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Blue Apron vs. Snap: Which IPO Has Been Worse So Far?
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>