What Happened?
Shares of online grocery delivery platform Instacart (NASDAQ: CART) jumped 2.1% in the afternoon session after Cantor Fitzgerald reiterated its Overweight rating on the stock with a $63 price target, citing the company's strategic value. The investment firm highlighted that an acquisition by a company like Uber would make "plenty of sense strategically" and that Instacart's current valuation might also attract private equity investors. The note pointed to Instacart's dominant position in the U.S. grocery delivery market, with over 65% market share, and its "best-in-class tech." Cantor Fitzgerald also underscored the company's strong financial health, including impressive gross profit margins of nearly 75%, double-digit revenue growth, and a strong balance sheet with minimal debt, which supports the positive investment thesis.
After the initial pop the shares cooled down to $37.42, up 1.8% from previous close.
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What Is The Market Telling Us
Instacart’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 6.4% on the news that BTIG downgraded the stock to Neutral from Buy, citing intensifying competitive pressure. The analyst noted that in just two weeks, grocers representing over 25% of Instacart's gross order value had signed partnerships with rivals like Amazon, DoorDash, or Uber. This raised questions about the company's growth path. The downgrade followed news from the previous session that competitor DoorDash and supermarket giant Kroger were expanding their grocery delivery partnership. This directly challenged Instacart, as Kroger was its third-largest customer and accounted for over 10% of its gross transaction value.
Instacart is down 13.1% since the beginning of the year, and at $37.42 per share, it is trading 29.6% below its 52-week high of $53.15 from February 2025. Investors who bought $1,000 worth of Instacart’s shares at the IPO in September 2023 would now be looking at an investment worth $1,110.
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