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Ibotta (IBTA) shares cratered 34% after a string of Wall Street downgrades followed a much weaker-than-expected second quarter and bleak outlook.
The company’s shift to a performance-based marketing model, called cost-per-incremental-dollar (CPID), is taking longer to gain traction, with analysts citing execution challenges, paused client pilots and a disruptive sales force reorganization as major headwinds.
Ibotta reported adjusted second-quarter EPS of $0.49, down 28% from a year earlier and missing the $0.52 analyst estimate.
Adjusted EBITDA fell 29% to $17.9 million, with margin contracting to 21%, while revenue declined 2.2% to $86 million, missing expectations by $4.5 million.
Direct-to-consumer redemptions dropped 23% and redeemers fell 11%, but third-party publisher redemptions rose 12% and redeemers increased 32%.
Ibotta guided for Q3 sales to be between $79 million and $85 million, notably below the consensus estimate of $101.7 million.
For EBITDA, the outlook was $9.5-13.5 million, a far cry from the consensus of $30.9 million. The guide implies a 14% margin at the midpoint.
Goldman Sachs cut its rating to Neutral from Buy and lowered its price target from $58, pointing to Q2 revenues and Q3 guidance that both missed expectations, as well as adjusted EBITDA below forecast.
The bank said the transition toward CPID is “likely to remain a headwind for the short/medium term,” with better visibility needed before turning more constructive.
Separately, Bank of America (BofA) downgraded the stock to Underperform from Neutral, slashing its price objective to $24 from $57.
The bank cited a 3Q revenue guide 20% below Street estimates, weaker promotional supply and the decision by two early CPID clients to pause spending.
BofA also trimmed its 2025 revenue and EBITDA forecasts by 10% and 38%, respectively, and now models a revenue decline in 2026.
JMP Securities cut its rating to Market Perform from Market Outperform, noting that CPID pilot campaigns were halted mid-Q2 and have yet to restart.
The broker expects growth to resume only in the second half of 2026, highlighting the time it takes to secure budgets and roll out the model across larger clients, alongside macro-driven pullbacks in CPG promotional spending.
Evercore ISI lowered its rating to In Line from Outperform and cut its price target to $38 from $65.
The firm flagged “disruptions from its sales reorganization and slower scaling (or pausing) of new performance marketing clients” as key factors, with no clear line of sight to a return to revenue growth before late 2026.
Wells Fargo also downgraded to Equal Weight from Overweight and halved its price target to $30, saying its earlier forecast for only a moderate financial impact had been “overly optimistic.”
The investment bank expects revenue declines to accelerate in the near term, with 3P promotions constrained and sales disruptions lasting through year-end.