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 — Q2 2018 call → NOWe need to determine if management conveys that the company is currently charging less than the market would bear, and that they are actively closing that gap. The transcript discusses various pricing and value strategies, but we need to see if management explicitly states that they are undercharging relative to value and are now raising prices or capturing more. The examples given: Taco Bell's $1 Nacho Fries, $1 Triple Melt, etc. They talk about value offerings. But do they say they are leaving money on the table? They mention "value" as a key driver, but not that they are undercharging. They also mention "disruptive value" and "everyday value" but that's about offering low prices to attract customers, not about raising prices. They talk about "pricing power" but not explicitly. They mention "we have not unleashed the marketing muscle" for delivery, but that's not about pricing. They also mention "we are seeing incremental transactions at a much higher check" for delivery, but that's about delivery, not about raising prices. They also mention "we are confident in our plans" but no explicit statement about undercharging. The question asks: does management convey that the company is currently charging LESS than the market would bear? That would mean they think they could charge more and still keep customers. They don't say that. They talk about value as a strategy, but not that they are underpricing. They also talk about "value" as a way to drive sales, not as a gap to close. They mention "we have adjusted our marketing" but not pricing. They also mention "we are seeing good customer response" but not about raising prices. So I think the answer is NO. They are not claiming they are undercharging and closing the gap. They are using value as a competitive tool, but not saying they are leaving money on the table. Also, they mention "we are confident in our plans" but no explicit pricing gap. So 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.