( Maplebear ) Instacart (NASDAQ:CART) was initiated with a Market-Perform rating at Bernstein on Thursday, with analysts assigning a $30 price target on the stock.
They acknowledged that CART "is a market leader in an attractive TAM, with inherent value residing in its digital advertising business (still sub-scale today)."
However, the firm expects market share and ad dollars will be hard fought "as the competitive intensity of the sector is increasing."
"We have already seen GTV growth slow down YTD, and we expect the company to have to make difficult trade-offs between growth and profitability going forward," the analysts wrote.
They added that CART's profitability is encouraging, but they believe investors want to see better growth, and "until there is line of sight to a notable re-acceleration, it's hard to argue why investors should buy the stock now."
Elsewhere Thursday, BTIG maintained CART at Neutral, with analysts there telling investors in a note that slowing growth has been a key debate for CART.
Looking to the grocery delivery company's third quarter results, they said the firm's data points to a modest improvement in GOV growth but to a still-muted mid-single-digit level with orders flat-to-up slightly on a sequential basis.
"While CART trades at a modest 9x our 2024 EBITDA estimate and a sharp discount to rideshare-delivery peers, we maintain a Neutral rating given modest topline growth prospects," they said.