Benchmark Reiterates Hold Rating on Instacart (CART)

Benchmark analyst Mark Zgutowicz reiterated a Hold rating on Instacart (NASDAQ: CART).

The analyst commented, "CART reports 1Q earnings on Thurs., 5/1, AMC –see earnings cheat sheet on pg. 2. Our 1QE GTV is positioned near the midpoint of guidance, reflecting +9% y/y growth vs. the industry’s +23%, according to Grocery Dive online delivery and pickup data (see Fig 1 below). The chart below highlights a widening y/y growth delta over LTM between CART GTV and industry, suggesting competitive promotional pressures (predominantly Walmart and Amazon) may continue to translate to limited Transaction take rate expansion, particularly as CART indexes its platform to affordability. Importantly, CART removed the “reduced” service fee benefit for Instacart+ members starting March 1st. While this prior fee benefit was not quantified, its removal may benefit 2QE take rate. In addition, the company rescinded its 5% credit for pickup orders. We are interested to hear more on the strategic rationale for this new policy, in concert with the free delivery threshold cut for members to $10 from $35 in front of Thanksgiving."

For an analyst ratings summary and ratings history on Instacart click here. For more ratings news on Instacart click here.

Shares of Instacart closed at $42.01 yesterday.

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