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 answer only YES or NO. Need analyze transcript. Need determine if management conveys undercharging and closing gap. Let's inspect. Transcript: Mike Fries says strong subscriber growth after taking price increases across two-thirds customer base in Q1. "We took a lot of lessons that we learned from last year, and ensure that this year we reduce the impact of churn, and optimize the benefits to sales, and we think we hit the mark here. Going forward, as we manage the price value relationship in this time frame Q4, Q1 we think this RGU growth in the first quarter is the new normal for us..." This mentions price value relationship, but not necessarily undercharging. They took price increases. Need see if management claims gap between price and value and closing. They discuss price increases across markets, ranging 2.5-5%. But is that cost recovery? They say "price increases" and "price value relationship." Need see if they say they are undercharging relative to value. They mention "smart execution of price rises across our footprint" as part of Liberty Go. But no explicit "we are below market" or "leaving money on table." They say "we increased prices in majority of markets, in order to lay foundation for faster growth." They discuss "price increases" and "ARPU" but not necessarily gap. Also "we took price increases across 4 million customers" and "benefit through rest of year." But is that just price increases? Need answer NO if only price increases without claim undercharging. The question asks: management conveys that company currently charging LESS than market would bear, that own prices sit below value, and already begun closing gap while customers stay. In transcript, management says "price value relationship" but not that they are below. They say "we think this RGU growth in first quarter is new normal" after price increases. They don't say "we had been undercharging." They mention "price increases" but not "gap." Also they mention "price increases" as part of strategy, but no explicit "below market." There is a line: "We took a lot of lessons... reduce impact of churn, and optimize benefits to sales" - not undercharging. Also "smart execution of price rises" - not gap. So answer NO. Need ensure no other. They mention "price increases" across two-thirds, "price value relationship" but not "undercharging." They say "we are not AT&T" etc. No. So 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.