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 2021 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. The transcript is about Alignment Healthcare, a Medicare Advantage plan. Management discusses pricing, benefits, products, etc. They talk about increasing benefits, offering $0 premium products, etc. They mention that they are not going crazy on bids, they are disciplined. They talk about growth and profitability. They mention that they are investing in growth, but not raising prices. They talk about DCE program, but that's about a different product. They don't explicitly say they are undercharging and now raising prices. They talk about competitive benefits, but not about raising prices. They mention that they are focused on growth and not growth at all costs. They don't convey a gap between price and value that they are closing. They talk about product innovation and service, but not about charging more. They mention that they are not going to have 99% MBRs, meaning they are not underpricing to gain share. But that's about not underpricing, not about raising prices. They don't say they are leaving money on the table. They talk about investing in growth, but that's not pricing. They mention that they are redeploying outperformance towards growth, not towards raising prices. So no clear statement that they are undercharging and now closing the gap. 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.