Company Overview
Instacart received a major vote of confidence this morning when BMO Capital Markets upgraded the stock to Outperform from Market Perform with a $58 price target – representing approximately 55% upside from current levels around $37. The upgrade comes just one day after Instacart reported Q3 2025 earnings that beat across the board: orders surged 14% year-over-year to 83.4 million (versus 82.9 million expected), revenue hit $939 million (ahead of $934 million estimates), and adjusted EBITDA reached $278 million (crushing the $267.7 million consensus).
What makes Instacart particularly compelling is the strategic transformation underway under new CEO Chris Rogers, who took over in August 2025. While the core grocery delivery marketplace remains strong with growing customer loyalty and increasing order frequency, the company is increasingly becoming a technology powerhouse for the entire grocery industry. Nearly 29% of Q3 revenue – approximately $269 million – came from non-delivery sources including advertising (generating over $1 billion in annualized revenue) and enterprise technology solutions that now power more than 350 retailer e-commerce sites. BMO analyst Brian Pitz highlighted that 80% of Instacart’s $9.17 billion in quarterly gross transaction value now originates from non-exclusive retailers, with deep integrations supporting continued double-digit annual GTV growth. The company’s announcement of a $1.5 billion increase to its share buyback program – including a $250 million accelerated repurchase starting November 11 – represents roughly 15% of Instacart’s fully diluted market cap and signals strong management confidence in long-term value creation.
Key Technical and Fundamental Drivers
BMO Upgrade Today → Outperform, $58 Target BMO Capital upgraded Instacart to Outperform this morning with a $58 price target (55% upside), citing attractive valuation at 7.4x EV/EBITDA and 17.1x P/E – discounts to historical averages despite best-in-class positioning.
Q3 Beat Yesterday → All Key Metrics Topped Orders jumped 14% to 83.4M (vs 82.9M expected), revenue hit $939M (vs $934M), GTV reached $9.17B (vs $9.11B), and adjusted EBITDA came in at $278M (vs $267.7M), with margins expanding 300bps year-over-year.
Enterprise Platform Momentum → 350+ Retailer Sites Instacart’s enterprise technology now powers over 350 retailer storefronts, with 80% of GTV from non-exclusive partners and deep integrations supporting the company’s transformation beyond just delivery to full grocery tech enablement.
Advertising Revenue Growth → $1B+ Annualized The retail media network generates over $1 billion in annualized revenue across Instacart marketplace, 240+ Carrot Ads partner sites, in-store Caper Carts, and off-platform partners – creating a unified, closed-loop advertising ecosystem.
Massive Buyback Expansion → $1.5B Increase The company increased its share buyback authorization by $1.5 billion and announced a $250 million accelerated repurchase beginning today (November 11), representing ~15% of fully diluted market cap.
Market Takeaway
Instacart’s transformation from pure-play grocery delivery service to comprehensive technology platform for the entire grocery industry represents one of the most underappreciated pivot stories in tech. With the stock down 10% year-to-date before yesterday’s earnings, BMO’s upgrade today highlights how the market has been missing the strategic value creation occurring beneath the surface. The 29% of revenue from non-delivery transactions – including the $1 billion+ annualized advertising business and enterprise platform powering 350+ grocer sites – provides significantly higher-margin, more defensible revenue streams than delivery alone.
CEO Chris Rogers’ focus on “affordability and boosting enterprise solutions” is resonating with both consumers and retailers. The data point that price-parity retailers (those aligning online prices with in-store prices) are growing 10 percentage points faster than marked-up retailers demonstrates Instacart’s ability to drive meaningful business outcomes for partners. This positions the company as an essential strategic partner rather than just a delivery vendor, creating much stickier relationships. With 1.5 billion lifetime orders generating unparalleled grocery data and an experienced shopper network ensuring fresh food quality, Instacart has built competitive moats that are difficult to replicate.
The competitive concerns around Amazon’s fresh food delivery expansion and DoorDash’s Kroger partnership appear overblown, as evidenced by Kroger expanding its Instacart agreement last week – what Rogers called “a strong vote of confidence.” JPMorgan’s maintained Overweight rating alongside BMO’s upgrade reinforces the bullish sentiment, with analysts noting that Instacart’s deep integrations with non-exclusive retailers support continued double-digit GTV growth. The massive $1.5 billion buyback expansion beginning today signals management’s view that the stock is significantly undervalued at current levels.
Trading at 7.4x EV/EBITDA and 17.1x P/E – both at discounts to historical averages – while delivering 14% order growth, expanding margins (300bps improvement year-over-year), and building a billion-dollar advertising business alongside the enterprise platform, Instacart offers compelling value. BMO’s $58 price target implies 55% upside, but with Q4 guidance appearing conservative (as analysts noted) and the company just scratching the surface of its international expansion plans in Europe and Australia, the long-term opportunity could be substantially larger. As the definitive technology and enablement partner for a trillion-dollar grocery industry “ripe for innovation,” Instacart’s journey is just getting started.