Instacart (CART), a leading online grocery shopping service provider, is making waves in the market. Over the past year, Instacart’s stocks have doubled, punctuated by its recent inclusion in the S&P MidCap 400 index. On the partnership front, Instacart is broadening its horizons with a nationwide partnership with Ulta Beauty (ULTA) for same-day delivery, integration with Cut+Dry for advertising, and a multiyear collaboration with Samsung Electronics (GB:SMSN) to enable grocery shopping directly from Samsung’s Bespoke refrigerators.
Stay Ahead of the Market:
- Discover outperforming stocks and invest smarter with Top Smart Score Stocks
- Filter, analyze, and streamline your search for investment opportunities using Tipranks' Stock Screener
Financially, Instacart has recently posted strong Q3 results, with top-and-bottom-line beats, and Wall Street analysts are mostly optimistic about the company’s future prospects. The stock trades at a premium, so investors will need to pay up for this market leader.
Partnerships Driving Growth
Instacart (the market name for the parent company Maplebear) offers online grocery shopping to households via a mobile application and website. The company sells and delivers grocery products and provides pickup services. In addition to these offerings, Instacart manages virtual convenience stores and offers software-as-a-service solutions to retailers.
The company has formed a nationwide partnership with Ulta Beauty to provide same-day delivery of Ulta Beauty products from over 1,400 stores across the U.S. Additionally, Instacart will integrate Carrot Ads technology – an e-commerce and advertising platform for independent foodservice distributors and manufacturers across the Cut+Dry platform. This integration is expected to provide direct access to buyers and unlock new revenue potential for distributors and operators.
Furthermore, a recent strategic partnership with Samsung Electronics has the companies collaborating to provide a new and convenient way for consumers in the U.S. to shop for groceries directly from their Samsung Bespoke refrigerators. This functionality will be enabled by integrating Samsung’s proprietary food recognition technology and Instacart’s advanced product-matching API, beginning with the 2025 Bespoke refrigerator models.
Over the past year, the stock has nearly doubled in value, helping drive Instacart’s recent inclusion in the S&P MidCap 400 index.
Robust Recent Performance
Instacart recently reported results for Q3, with revenue reaching $852 million, outperforming analysts’ expectations by $8.64 million. The company reported robust performance as Gross Transaction Volume (GTV) surpassed the upper guidance range, with 11% year-over-year growth. Order growth increased by 10%, average order value growth was 1%, while advertising revenues grew by 11% year-over-year.
Instacart’s profitability remains strong, with the fourth consecutive quarter of positive GAAP net income and adjusted EBITDA of $227 million, an increase of 39% year-over-year. Operating cash flow has also risen significantly to 67% at $185 million. GAAP earnings per share (EPS) were $0.42, beating consensus estimates by $0.20.
Looking forward to Q4, management anticipates GTV of $8.5 billion to $8.65 billion, representing growth of 8% to 10% year-over-year. Q4 adjusted EBITDA is projected to be between $230 million and $240 million. The company expects the primary growth driver in adjusted EBITDA from adjusted operating expense leverage.
The Index Effect
The “index effect” refers to the phenomenon where a stock experiences a short-term surge in price following its addition to a significant index such as the S&P 500. This jump results from heightened demand from index funds and passive investors. The stock is up over 8% in 2025, and its addition to the S&P MidCap 400 index is likely playing a role. The stock trades near the higher end of its 52-week price range of $22.25 – $50.01 and shows ongoing positive price momentum as it trades above the major moving averages. It trades at a relative premium to industry peers, based on its P/S ratio of 3.67x compared to the Consumer Staples sector average of 1.15x.
Analysts following the company have been constructive on CART stock. For instance, Cantor Fitzgerald’s Deepak Mathivanan, a five-star analyst according to Tipranks’ ratings, has reiterated an ‘Overweight’ rating on the shares with a price target of $55, noting that the fundamental outlook is promising, with expectations that the company can deliver robust growth and margin expansion in 2025.
Based on the recent recommendations of 20 analysts, Instacart is rated a moderate buy overall. Their average 12-month price target for CART stock is $50.69, representing a potential upside of 14.61% from current levels.
Conclusion on CART
Instacart’s performance in the last year has grabbed attention and helped lay the path for its recent addition to the S&P MidCap 400 index. Key partnerships with Ulta Beauty, Cut+Dry, and Samsung have broadened its services and are anticipated to expand its growth. Its strong Q3 results and optimistic Q4 forecasts underline the company’s robust financial health. While investing in Instacart does come at a premium, with the company’s forward movement and innovative partnerships, it’s a potentially appealing option for investors.
