Room to raise the ceiling: management says its own prices, rates, or terms sit below what the market would currently bea
The model's full reasoning — Q3 2018 call → NOWe need to determine if management conveys that the company is currently charging less than the market would bear, and that it is actively closing that gap. Look for statements about pricing being below value, raising prices, resetting terms, etc. In the transcript, there is discussion about Repatha pricing. Murdo Gordon says: "we made an important decision to improve the access and affordability of Repatha especially for Medicare Part D patients... We've launched a new NDC at a list price of $5,850 which was the only viable option to reduce out-of-pocket cost for Medicare patients as their copay is calculated from the list price. This should substantially lower their out-of-pocket costs and lower the abandonment rate which is as high as 75%. Not only is this good for patients but it's also necessary to compete. Although the lower price may impact Repatha sales near term, as plans update we expect to see a positive impact on volume growth..." This is about lowering price, not raising. So that's not it. Any other pricing? There is mention of "net selling price" declines for Neulasta, EPOGEN, etc. That's price pressure, not raising. What about Aimovig? They talk about pricing for access, but not raising. Any mention of undercharging? No. The question asks: "does management convey that the company is currently charging LESS for what it sells than the market would presently bear — that its own prices, rates, fees, or terms sit meaningfully below the value customers are getting or below what the current market would support — AND that the company has already begun, or is now actively beginning, to close that gap while customers stay?" There is no such claim. Management is dealing with price pressure, lowering prices for access, etc. No indication of raising prices to capture value. Thus answer NO.
| Ticker | Company | Call | Date | Call grade |
|---|---|---|---|---|
| MEC | Mayville Engineering Company, Inc. | Q3 2022 | 2022-11-05 | B+ |
| CAG | Conagra Brands, Inc. | Q2 2017 | 2016-12-22 | C+ |
| SOHO | Sotherly Hotels Inc. | Q3 2016 | 2016-11-08 | D |
| RCL | Royal Caribbean Cruises Ltd. | Q1 2016 | 2016-04-29 | C+ |
| HPP | Hudson Pacific Properties, Inc. | Q4 2015 | 2016-02-25 | C |
HPP · Q4 2015 → YESThe question is: Does management convey that the company is currently charging LESS for what it sells than the market would presently bear — that its own prices, rates, fees, or terms sit meaningfully...YES The transcript shows management explicitly describing a gap between its current charges and what the market now supports, then confirming that the company is already closing it through mark-to-market resets and higher new/renewal rents. Victor Coleman states that the company has “rolled out 80% plus mark to market” on recent leases 2.5 years old, and that cash rent spreads on 1.6 million square feet executed since the acquisition were “north of 30%” with “20%, 25% mark-to-market for 2016 and 2017.
MEC · Q3 2022 → YESThe question is: Does management convey that the company is currently charging LESS for what it sells than the market would presently bear — that its own prices sit meaningfully below the value custom...YES Management explicitly states that they have taken pricing actions in 2022 and have "more room for margin expansion through continued value pricing even beyond the pricing actions taken during 2022." This conveys that their current prices sit below what the market would support, and they are actively beginning to close that gap with further value pricing.
SOHO · Q3 2016 → YESThe question is: Does management convey that the company is currently charging LESS for what it sells than the market would presently bear — that its own prices, rates, fees, or terms sit meaningfully...YES The transcript shows management explicitly identifying a rate gap at the Laurel hotel (and similar situations at other properties) where current charges sit below the competitive set/market, while describing active steps already underway to close that gap through continued ramp-up and occupancy/rate improvements.