What Happened?
Shares of online grocery delivery platform Instacart (NASDAQ: CART) jumped 12.3% in the afternoon session after the online grocery platform reported second-quarter results that surpassed Wall Street's expectations for revenue and key profitability metrics. The company's revenue grew 14.1% year-over-year to $1.04 billion, beating analyst estimates.
While its GAAP earnings per share of $0.45 missed expectations, investors appeared to focus on stronger-than-anticipated adjusted EBITDA, which came in at $313 million against a consensus of $297.8 million. Furthermore, Instacart demonstrated robust cash generation, with its free cash flow margin reaching an impressive 46%, a significant increase from the same quarter last year. The strong performance in revenue and operational profitability signaled underlying business health, boosting investor confidence.
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What Is The Market Telling Us
Instacart’s shares are quite volatile and have had 18 moves greater than 5% over the last year. But moves this big are rare even for Instacart and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 13.2% on the news that the company reported strong fourth-quarter revenue that beat analyst estimates and provided a robust forecast for the upcoming quarter, overshadowing a miss on earnings per share. Instacart's quarterly revenue came in at $992 million, exceeding analyst expectations. While its earnings per share of 30 cents missed the street's estimate of 51 cents, investors appeared to focus on the company's growth momentum.
The company reported its strongest quarterly Gross Transaction Value (GTV) growth in three years, with the value of products sold rising 14% year-over-year. Additionally, Instacart issued a strong forecast for the current quarter, expecting GTV between $10.13 billion and $10.28 billion, which was above analysts' projections. The company also noted it had repurchased $1.4 billion of its shares. Following the report, Needham raised its price target on the stock to $55 from $50, citing the company's solid execution.
Instacart is up 15.6% since the beginning of the year, and at $50.78 per share, it is trading close to its 52-week high of $51.77 from August 2025. Investors who bought $1,000 worth of Instacart’s shares at the IPO in September 2023 would now be looking at an investment worth $1,507.
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