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 — Q2 2021 call → NOWe need to determine if management conveys that the company is currently charging less than what the market would bear, and that they are actively closing that gap. The transcript mentions pricing discipline, price increases, and multiyear contracts with annual price increases. Richard Hanks says: "we are much more disciplined now in ensuring that we have annual price increases baked into those multiyear contracts" and "we've reviewed our pricing algorithms for next year. And we're very confident that we will realize plus 4% across the portfolio next year." This suggests they are raising prices, but is it because they were undercharging relative to value? They mention "price realization" and "pricing algorithms" but no explicit statement that they were leaving money on the table or that prices were below market. They talk about being disciplined, but not that they were undercharging. The context is more about improving pricing discipline and realizing price increases, but not necessarily that they were below value. Also, they mention "price increases" but not that they were below market. The question asks if management conveys that the company is currently charging LESS than what the market would bear. There is no explicit statement like "we are undercharging" or "our prices are below value." They talk about price increases but that could be standard inflation or value capture. They also mention "price realization" but not that they were leaving money on the table. So I think the answer is 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.