Grocery delivery company Instacart (NASDAQ:CART) announced Q4 results after the market closed on Tuesday. The company’s revenues missed Wall Street’s forecast. Following the earnings release, Instacart stock fell over 4.8% in Tuesday’s after-hours trading.
Further, the company stated that it is streamlining its operations and plans to cut 250 jobs. The move will enable the company to pursue growth initiatives and improve efficiency.
CART – Q4 Performance
Instacart delivered total revenue of $803 million, up 6% year-over-year and representing 10.2% of gross transaction value (GTV). Improved fulfillment speed, an increase in orders, and higher ad revenues supported its top-line growth rate. However, its total revenue fell marginally short of the analysts’ estimate of $804.6 million.
While the company missed analysts’ sales forecast, its management remains upbeat about expanding its omnichannel offerings, such as Caper Cart and Instacart’s artificial intelligence (AI)-powered smart carts. Also, it is focusing on expanding its retail media and offsite advertising business amid heightened competition in the grocery delivery space.
As for Q1 2024, the company expects to deliver GTV between $8 billion and $8.2 billion, higher than the analysts’ expectation of $7.92 billion. Moreover, it forecasts adjusted EBITDA in the range of $150 million to $160 million, compared with analysts’ projections of $151.6 million.
What Is Instacart’s Outlook?
Instacart is a leading player in the online grocery delivery space. Moreover, its focus on omnichannel offerings and growing ad business will likely support long-term growth. However, near-term macro headwinds keep analysts cautiously optimistic.
It has five Buy and seven Hold recommendations for a Moderate Buy consensus rating. CART stock has gained over 18.6% year-to-date. The average CART stock price target of $35.75 implies 31.24% upside potential from current levels.
