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 — Q4 2021 call → NOWe need answer only YES or NO. Need analyze transcript. Need determine if management conveys undercharging and closing gap. Let's parse. Transcript is Axos Financial earnings call. Topics: net interest margin, deposits, loans, E*Trade acquisition, securities. Need find pricing gap. Management discusses deposit costs, loan yields, mortgage banking, securities. Any mention of raising prices/fees? They mention "we continue to reduce funding costs by replacing higher cost deposits with non-interest bearing demand deposits." That's cost reduction, not pricing. "Non-interest bearing deposit balances grew..." "end of period cost of interest bearing demand and savings accounts went from 58 bps to 18 bps." That's lowering cost of funds, not charging more. Loan yields: "Loan yields continue to hold up well at 5.15%, a five basis point increase from 5.1% in the quarter ended March 31st, 2021." But then later Greg says "part of the reason when you saw that the fact that loan rates went up over the quarter, was that -- that was a Remax because the warehouse lending business has probably one of the lower average rates in the bank. And so when that shrunk it kind of move that around a little bit. So I don't think you should use that as indicative of the idea that would carry forward next quarter." So not pricing power. Question asks: Does management convey company currently charging LESS than market would bear, and already begun closing gap? Need look for any statement. There is discussion of "we continue to expand relationships... single-family warehouse business generates strong risk adjusted returns." No. Maybe E*Trade acquisition: "EAS provides turnkey RIA platform... incremental fee income, and low cost deposits." No pricing gap. Maybe "We have been undercharging relative to value" not present. Maybe "we are in a position to maximize use of EAS deposits... does not expect acquisition to adversely impact NIM." No. Maybe "we have access to $2.5 billion FHLB borrowing..." No. Maybe "Our deposit platform investments have generated meaningful increases in non-interest bearing deposits significantly lower our cost of interest-bearing deposits, and allowed us to earn fees from placing deposits in other banking institutions." That's earning fees from placing deposits, but not raising prices to customers.
| 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.