Benchmark upgrades Instacart parent Maplebear on durable growth trends
Investing.com -- Benchmark upgraded Maplebear Inc., parent of Instacart (NASDAQ:CART), to Buy from Hold, given the stronger-than-expected growth in grocery transaction volumes and signs the business is benefiting from broader industry shifts.
The brokerage raised its price target to $67, saying the company’s second-quarter results show accelerating gross transaction value (GTV) even though its market share may not be increasing.
It said demand is being driven by smaller and regional grocers leaning on Instacart’s platform to compete with giants like Walmart (NYSE:WMT) and Amazon (NASDAQ:AMZN).
U.S. online grocery delivery sales rose 42% in the second quarter, according to Mercatus data cited in the note, about four times faster than Instacart’s own GTV growth.
Still, Benchmark said the company’s steady take rate and improving margins support the stock’s upside potential.
Instacart’s adjusted EBITDA margin as a share of GTV rose 40 basis points year-over-year in Q2, and expenses grew just 1%.
The firm said the company is showing strong operating leverage and continues to benefit from long-term trends in digital grocery shopping.
Benchmark’s valuation assumes conservative long-term revenue and margin targets, including lower transaction and advertising take rates and a moderation in GTV growth by 2030.
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