The first thing to do when considering how much debt a business uses is to look at its cash and debt together. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. Why Does Debt Bring Risk?ĭebt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. But the real question is whether this debt is making the company risky. As with many other companies Blue Apron Holdings, Inc. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. In terms of the Zacks Industry Rank, Food - Miscellaneous is currently in the top 41% of the 250 plus Zacks industries. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. The current consensus EPS estimate is -$0.47 on $135.98 million in revenues for the coming quarter and -$0.88 on $514.42 million in revenues for the current fiscal year. It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. So, the shares are expected to perform in line with the market in the near future. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock.
Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.Īhead of this earnings release, the estimate revisions trend for Blue Apron: mixed. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.Įmpirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions.
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook.
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