Instacart, the world’s largest online grocery marketplace, is expanding beyond delivery and transforming the in-store grocery shopping experience with new technologies like smart shopping carts and digital flyers. The company is also leveraging its massive network of over 85,000 stores and 25 million customers, making it a compelling investment opportunity.
Maplebear CART, the operator of the Instacart online grocery, is experiencing positive earnings estimate revisions, indicating strong growth prospects. The stock has been gaining lately and is likely to continue this trend due to the improving earnings outlook. Analysts are becoming increasingly optimistic about Maplebear’s performance, leading to higher consensus estimates for both the current quarter and the full year. This optimistic outlook, coupled with Maplebear’s Zacks Rank #1 (Strong Buy), makes it a compelling investment opportunity.
Stifel’s analysis suggests that Amazon’s recent service announcement, which incurs additional costs for Prime subscribers, is unlikely to lead to a significant partnership with Instacart. The service’s price and basket size thresholds align with Instacart’s, limiting the potential for cost savings for Amazon customers. Additionally, the move is not anticipated to cause a substantial shift of Instacart’s existing customer base to Amazon due to the similar cost dynamics between the two services. However, Stifel acknowledges that Amazon’s entry into this space could hinder Instacart’s growth with new customers.
Shares of Maplebear (CART), known as Instacart, experienced a significant decline on Tuesday due to Amazon’s announcement of a comparable grocery delivery service for Prime members. Amazon’s subscription plan offers unlimited delivery in over 3,500 locations across the U.S. for orders exceeding $35 from Whole Foods, Amazon Fresh, and various local retailers. Instacart+ membership currently stands at $9.99 per month or $99 per year, providing unlimited free delivery on orders of $35 or more. Amazon’s competitive pricing and additional perks, such as free one-hour delivery windows and priority access to Recurring Reservations, have raised concerns among Instacart investors.
