Instacart stock slipped late Tuesday, despite the grocery delivery company reporting third-quarter earnings and sales that beat consensus targets. The company's forecast for core profit in the fourth quarter came in below expectations.
Instacart said that it earned 42 cents per share on sales of $852 million for the September-ended quarter. Analysts polled by FactSet projected the San Francisco-based company would post earnings of 22 cents per share on sales of $844 million.
For the same period a year earlier, Instacart lost $20.86 per share with sales of $764 million. The company pinned the big loss on elevated stock-based compensation costs following its initial public offering in September 2023.
The concern for investors may be in the company's fourth-quarter guidance. The company is projecting between $8.5 billion and $8.65 billion in gross transaction value for its platform. The midpoint of that range is just narrowly ahead of the $8.57 billion in GTV that analysts were projecting for Instacart's Q4.
But Instacart's forecast for Q4 adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) came in at $235 million, at the midpoint of its range. Analysts were looking for $243 million, according to FactSet.
On the stock market today, Instacart stock is down more than 3% at 46.70 in recent after-hours action.
Instacart Orders Climb 10% To 73 Million
Instacart handled 72.9 million orders for the September quarter, up 10% year-over-year. The gross transaction value for those order grew 11% to $8.3 billion, the company said.
"With the grocery market still vastly underpenetrated online, we're taking an aggressive approach to reinvesting in opportunities that we believe can drive long-term growth while steadily expanding profitability," Chief Executive Fidji Simo said in a letter to investors.
Adjusted EBITDA increased 39% year-over-year to $227 million. That was ahead of estimates for $212 million, according to FactSet.
Instacart Stock Doubles In 2024
Prior to earnings, Instacart stock gained 1.2% in Tuesday trading. Shares of Instacart – which trades under the name Maplebear – have gained 103% year-to-date, well ahead of a 26% return for the S&P 500 over the same period.
Coming into the report, Instacart stock had an IBD Composite Rating of 68 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
But CART stock has an IBD Relative Strength Rating of 94 out of 99. The RS Rating means that Instacart has outperformed 94% of all stocks in IBD's database over the past year.
Prior to earnings, Instacart stock was near a profit-taking zone following a September breakout above 39.59 cup-with-handle buy point, according to MarketSurge.
