Instacart Parent’s Stock Is a Buy, Analyst Says. Can It Fend Off Amazon and Uber?

Instacart faces growing competition from names like Walmart, Amazon, and DoorDash. (Photo by Vanja Savic)

Key Points

• BMO Capital Markets upgraded Maplebear to Outperform and reiterated a $58 price target.
• Maplebear’s third-quarter adjusted earnings per share were 81 cents.
• Order growth accelerated to 14% year-over-year in the third quarter, up from 10% a year ago and 4% in 2023.

Instacart parent company Maplebear enjoyed a welcome reprieve on Tuesday from what has been a rough 2025, and investors in the grocery delivery leader may see more gains ahead.

Analysts at BMO Capital Markets upgraded Maplebear to Outperform from Market Perform and reiterated a $58 price target in a research note on Tuesday. Instacart is growing its core customer base while also varying its revenue streams, the bank said, and its valuation looks attractive.

Maplebear stock rose 6.4% to $39.70, putting it on pace for its largest single-day jump since May 2, according to Dow Jones Market Data. Shares remain down more than 4% this year, lagging behind the market in part because of new competition from players such as Amazon.com, DoorDash, and Uber Technologies.

When investors zoom in on Instacart alone and ignore the competitors, there’s a lot to like. The potential online grocery market remains vast but mostly unclaimed, BMO pointed out, and Instacart has first-mover advantage.

On Monday, Maplebear reported adjusted earnings per share of 81 cents for the third quarter—below analysts’ consensus estimates—but revenue, gross transaction value, and net income all exceeded expectations.

Maplebear’s year-over-year order growth accelerated to 14% in the third quarter from 10% a year ago and 4% in 2023. While average order values have declined four quarters in a row, this trend appears to have bottomed out, BMO argued.

“The core grocery marketplace remains healthy and continues to grow, driven by a loyal (and growing) customer base with increasing order frequency and improving retention,” wrote analyst Brian J. Pitz.

The bigger the scale and the larger the average basket, the more Instacart’s per-order profit will improve, BMO added. Meanwhile, the company is proactively investing in artificial intelligence to help optimize routing, improve shopper efficiency, and reduce variable costs.

The question dividing investors is whether Instacart can survive the heightened competition in the grocery delivery space. The company is focusing more on support and fulfillment for smaller grocers rather than its traditional delivery service, analysts at Wedbush Securities argued. This repositioning is a sign of competitive pressures, they said.

“We believe Instacart is at risk of losing incremental market share to other leading intermediaries and grocers that can leverage their scale and success in adjacent categories to capture demand for online grocery and convenience,” wrote Wedbush analyst Scott Devitt in a research note on Monday. The firm reiterated an Underperform rating for Maplebear stock and slashed its price target to $36 from $40.

Piper Sandler analysts, meanwhile, are bullish on digital grocery as a whole, but see two types of competitors compressing Instacart’s market share. Walmart and Amazon are larger, with more resources and greater scale. And food delivery players Uber and DoorDash are growing at a faster clip.

“CART may get pinched in the middle,” wrote Piper Sandler’s Thomas Champion and James Callahan, who downgraded Maplebear to Neutral from Overweight and cut their price to $41 from $62 in a research note before Monday’s earnings print.

Still, Instacart’s revenue streams extend beyond delivery. The company’s enterprise platform provides fulfillment services, in-store technology, and other e-commerce solutions to grocers. This service is a “key differentiator,” Pitz, the BMO analyst, wrote. Its advertising business also generates over $1 billion in annualized revenue and is larger as a share of transaction value than that of Uber or DoorDash, BMO said.

Maintaining market share and profit margins in the core delivery business will be tricky, especially with Amazon now in the mix, BMO conceded. But Instacart hasn’t seen any impact in markets where it now competes with the e-commerce giant.

How long that stays the case will determine the fate of Maplebear shares.

Write to Nate Wolf at nate.wolf@barrons.com