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 2023 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 mentions pricing, but let's examine. Duncan Bates says: "We have held pricing levels and held production levels as we continue to build a backlog across the manufacturing plants." Later: "We have held pricing levels... We have not dropped prices across the board." He says: "We are going to rightsize our SG&A and rightsize our overhead for a slower period and continue to hold price as the market recovers even to the detriment of volume." That suggests they are holding price, not raising it. They are not saying they are undercharging. They are defending price against pressure. Also, they mention that the decrease in net revenue per unit was due to mix, not price concessions. So they are not raising prices. They are holding them. No mention of closing a gap. They talk about exploring adding financing products, but not about raising rates. They say "we are pushing rate higher now" in the context of consumer loans, but that is for certain borrowers with lower credit quality, not a general gap. Also, they say "we have kept our rates low because we're not borrowing to land" but that is not a claim of undercharging relative to value. They are not saying they are leaving money on the table. They are holding price to maintain margins. So answer is NO. 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.