Instacart New Stock Buy Mizuho Stocks Rising By Investing.com
Mizuho (NYSE: ) Securities initiated research on shares of Instacart, giving the stock an outperform rating and a $55 price target on Monday.
“We believe CART’s leadership position in the grocery delivery category is undervalued,” analysts led by James Lee said in a note.
Shares of Instacart (NASDAQ: ) rose 1.5% in premarket trading on Tuesday.
Mizuho analysts believe competitive concerns about Instacart are overstated, given the company’s deep technological integration with grocers, which includes inventory management and a specialized delivery workforce. This integration, they claim, results in a superior user experience that is difficult for competitors to replicate.
Mizuho praises Instacart’s strategy of investing in growth in a market with a total addressable market (TAM) of $1.2 trillion and only about 5% delivery service penetration.
Instacart’s initiatives to lower store costs have driven gross transaction value (GTV) growth to double-digits year-to-date. In addition, the integration of loyalty programs and dynamic pricing solutions is expected to make grocery prices more affordable for consumers.
The report further emphasized the role of advertising in funding Instacart’s growth investments, with the expectation that it will also drive EBITDA growth over time.
Analysts at Mizuho believe that the consensus long-term expectations for the company’s EBITDA are conservative and predict that any 1% increase in the underwriting rate could result in an increase of more than 20% in EBITDA. This outlook is supported by their estimate that Instacart’s fiscal year 2027 EBITDA will be approximately 15% above public expectations.
In terms of valuation, Mizuho argues that Instacart’s stock is attractive at a price of 9x FY2026 EV/EBITDA, a discount to their estimated annual revenue growth rate (CAGR) of over 10%.
“We believe the stock should trade on its upside as competitive concerns ease,” the analysts continued.
The $55 price target set by Mizuho reflects 11 times forecast fiscal year 2026 EBITDA, aligning with the company’s expected growth trajectory.
Instacart stock currently has 15 Buy ratings, 15 Neutral ratings and no Sell ratings from Wall Street analysts.