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Investing.com - Instacart posted fourth-quarter results Tuesday that fell short of Wall Street estimates and the grocery delivery platform said it expects order volumes to decline from a year ago as it rolls out low-and-no-cost delivery options.
Instacart ( Maplebear Inc.) (NASDAQ:CART) slumped more than 9% in premarket trading Wednesday.
For the three months ended Dec. 31, the company announced adjusted earnings per diluted share of $0.53 on revenue of $883 million, missing analyst estimates for EPS of $0.71 on revenue of $890.0M.
Gross transaction value, or GTV, rose 10% to $8.65B, beating estimates of $8.60B. Looking ahead, the company said it expects average order volume to decline.
"We also expect AOV will continue to decline year-over-year, primarily driven by restaurant orders and our new $0 delivery fee on $10 minimum basket feature, resulting in orders growth outpacing GTV growth in Q1’25.
For Q1, the company forecasts GTV of $9B to $9.150B, above analyst estimates for $8.95B, and adjusted earnings before interest, taxes, depreciation, and amortization, or EBITDA, of $220M to $230M. The EBITDA guide is around 5% short of consensus estimates.
"Q4 beat expectations along with more robust GTV outlook, but questions on durability of core GTV growth and potentially, the need to spend aggressively to drive topline growth, coupled with a softer EBITDA guide for Q1 keep us on the sidelines," Wolfe Research analysts commented.
Morgan Stanley (NYSE:MS) analysts lifted some estimates on CART following the print, and their price target to $45 from $44, but maintained an Equal Weight rating "as we wait for evidence of durably faster growth in this competitive category, or improvements in CART’s high margin ad business."
"For now, given the growth and valuation, we continue to prefer to invest in the online grocery industry through AMZN/UBER/DASH (more diversified businesses) over CART," they added.
Yasin Ebrahim contributed to this report.