Instacart Opportunity? Snaps Subscription, Inflation at Target
Here's the data...
Today's Data
Instacart's opportunity: Growth comes from where?
Snapchat's subscription revenue impressing...
Inflation data adjusted for real estate says the goal is met!
INSTACARTS GROWTH OPPORTUNITY IS PENETRATION ONLY 12%.
With the Instacart IPO on deck, we continue to review the investment case for the company. We watched the company's IPO roadshow, and we remain impressed with what they have achieved to date. The bull case for something like Instacart is the high transaction value per order, which makes each delivery more profitable than smaller-valued deliveries from the likes of restaurant-focused delivery platforms. Another key driver of growth is the low penetration of online sales for groceries relative to other categories like consumer electronics (66% share vs. 12%). Time will tell, and this is a company on our follow list.
Full Disclosure: Avory & Company is NOT an investor in CART, but has been offered shares.
SNAPCHAT'S SUBSCRIPTION REVENUE CONTINUES TO SURPRISE IN A GOOD WAY
Snapchat was one of the first companies to offer a subscription service to its user base. Our first impression was, 'Why would anyone pay for this?' As it turns out, people are paying. In August, they generated $17.9 million in revenue, roughly equivalent to an annualized revenue of $200 million. The question of the value users are getting from this offering remains open – if you have insights, please share.
INFLATION METRICS WHEN USING REAL-TIME REAL ESTATE PRICING SHOW INFLATION WELL BELOW 2%.
This was a big week for inflation. The cleanest takeaway is that inflation continues to trend in the direction of the Fed's goal. We think the best way to measure inflation is by using real estate data in real-time. With this adjustment, we see Core and Headline CPI are below the goal of 2%. The market is now pricing in a Fed pause for September and November. We still have some data and time until November, but we are closing in on the end of this rate hike cycle.
Disclaimer: Not a recommendation to purchase or sell any securities mentioned. This is for educational purposes only.
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Disclaimer: Not a recommendation to purchase or sell any securities mentioned. This is for educational purposes only.