Instacart, Inc. (CART), the online grocery delivery and pickup service provider, experienced a pre-market plunge of nearly 9% on Wednesday, February 26, 2025, following its fourth-quarter 2024 earnings report and guidance for the first quarter of 2025.
Despite reporting better-than-expected earnings per share (EPS) of $0.53 for Q4 2024, surpassing analysts' consensus estimate of $0.38, Instacart's stock tumbled due to a combination of factors:
1. Revenue Miss: Instacart's revenue for Q4 2024 came in at $883 million, narrowly missing analysts' expectations of $891 million.
2. Lower Profit Guidance: The company's guidance for adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) in Q1 2025 fell below analysts' estimates, forecasting $220 million to $230 million compared to the projected $237.3 million.
While Instacart reported a 10% year-over-year increase in gross transaction value (GTV) to $8.65 billion and an 11% rise in orders to 77.5 million, investors appeared to be concerned about the company's competitive valuation and the intensifying competition in the online grocery delivery space.