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 — Q1 2016 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, undercharging, raising prices, resetting agreements, etc. In the transcript, management discusses various aspects: revenue growth, 2Ku rollout, business model evolution, satellite capacity costs, ARPA trends. There is mention of ARPA dilution due to new aircraft, but that's about revenue per aircraft, not pricing below value. There is discussion about business models evolving, airlines paying for free Wi-Fi, but that's about future monetization, not current undercharging. Management says: "We do think that as bandwidth gets cheaper it is going to make a lot more options available to different airlines. And so we do think this will evolve." That's about future. There is no explicit statement that the company is undercharging relative to value and is now raising prices. The only pricing-related comments are about ARPA growth, but that's due to mix and bandwidth, not about raising prices. Also, there is mention of "we are seeing tremendous ARPA growth in Business Aviation" but that's not about closing a gap. The question asks: does management convey that the company is currently charging LESS than the market would bear? No such claim. They talk about future monetization, but not that they are leaving money on the table now and moving to close it. 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.