Is Instacart Falling Behind As Amazon, Uber, And Walmart Battle For Grocery Customers?

Core Viewpoint - Maplebear Inc. (Instacart) faces significant topline risks due to increasing competition in the online grocery delivery sector, leading to a downgrade by Piper Sandler from Overweight to Neutral and a price target reduction from $62 to $41 [1][2]. Competition Landscape - The digital grocery sector is experiencing heightened competitive intensity, with major players like Amazon, Uber, and DoorDash expanding their services [3][4]. - Amazon plans to expand same-day perishable delivery to 2,300 cities by year-end, up from 1,000 [3]. - Uber has partnered with Aldi to cover 2,500 stores nationwide, while DoorDash has expanded its agreement with Kroger to 2,700 locations [3][4]. Market Opportunity - The U.S. grocery and adjacent categories represent a $1.2 trillion annual opportunity, with digital penetration currently at 15% and expected to reach 20% by 2028 [4]. Instacart's Position - Instacart is ranked No. 3 in the U.S. with a digital grocery Gross Merchandise Value (GMV) of $33.46 billion in 2024, but may face challenges due to pricing and competition [5][6]. - Instacart's average digital basket costs about 30% more than in-store, leading to a $50 premium per order, which could total approximately $2,700 annually for regular customers [5][6]. Financial Projections - Piper Sandler has slightly reduced revenue estimates for Instacart, projecting $3.71 billion for 2025 (down from $3.73 billion) and $4.05 billion for 2026 (down from $4.11 billion) [6]. - EBITDA forecasts have also been revised to $1.06 billion for 2025 and $1.18 billion for 2026, both slightly lower than previous estimates [6]. Stock Performance - Instacart shares are currently trading at approximately 8x next-twelve-months EV/EBITDA, compared to a prior trough of 6x, with shares down 3.69% to $37.85 [7].