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Investing.com - Mizuho has reduced its price target on Instacart (NASDAQ:CART) to $42.00 from $45.00 while maintaining a Neutral rating on the stock. This target aligns closely with InvestingPro’s Fair Value assessment, which suggests the stock is slightly undervalued at its current price of $37.33.
The firm noted that Instacart’s third-quarter results were not "thesis-changing" for either bullish or bearish investors. For bulls, the company’s Gross Transaction Value (GTV) in the third quarter and its outlook showed no clear impact from competition. InvestingPro data shows Instacart maintains impressive gross profit margins of 74.84% and has achieved 10.47% revenue growth over the last twelve months.
Mizuho expressed slightly increased concern about Instacart’s advertising revenue following weaker guidance, though it acknowledged potential for acceleration in 2026 ad revenues, aligning with management’s projections. Despite these concerns, Instacart remains profitable with a diluted EPS of $1.73 over the last twelve months.
The research firm pointed out that Instacart shares have declined 16.2% since the end of August, compared to the S&P 500’s 4.9% gain during the same period, making the risk-reward profile "more attractive."
Despite this improved valuation, Mizuho cautioned that if growth weakens, Instacart’s multiple "has plenty of room downward left," adding that the company is not "out of the woods" regarding competitive threats from Amazon (NASDAQ:AMZN) and DoorDash (NYSE:DASH) as they expand their grocery offerings. However, Instacart’s strong balance sheet position—holding more cash than debt—provides some financial flexibility to navigate competitive pressures. The company’s overall financial health score is rated as "GREAT" according to InvestingPro’s comprehensive analysis, which includes additional insights available in the Pro Research Report.
In other recent news, Instacart reported its third-quarter 2025 earnings, surpassing Wall Street expectations with an earnings per share of $0.51 compared to the forecasted $0.50. The company’s revenue also exceeded projections, coming in at $939 million against an anticipated $933 million. Stifel reaffirmed its Buy rating on Instacart, maintaining a $49.00 price target, citing stronger-than-expected results for both EBITDA and revenue despite challenges in the advertising sector. Goldman Sachs adjusted its price target for Instacart to $66.00 from $67.00 while keeping a Buy rating, noting the company’s better-than-expected Gross Transaction Value due to healthy order growth and operational efficiencies. Oppenheimer continues to see potential in Instacart, reiterating its Outperform rating and $65.00 price target, highlighting the company’s 14% order growth, which slightly exceeded Wall Street expectations. The fourth-quarter guidance indicates a projected Gross Transaction Value increase of 10% at the midpoint, marking the highest growth rate since Instacart went public. Despite some headwinds in advertising, mid-sized segments showed resilience, contributing to the company’s overall performance.
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