Original title: DoorDash (DASH.US) Looks Most Likely to Take Over Instacart (CART.US), Analysts Call the Combo the "Optimal Answer" to Counter Amazon and Walmart
Author: Xiaoli Wang, Zhitong Finance
Cover image via | pexels
Zhitong Finance App has learned that Instacart is reportedly evaluating its sale options, with Uber and DoorDash initially seen as potential bidders. Although reports suggest Uber has ended acquisition talks, DoorDash now looks the most likely to take over its grocery-delivery rival. Analysts broadly believe that an Instacart–DoorDash combination is the most likely to happen and is the strongest pairing to counter the continued expansion of Amazon and Walmart in grocery delivery.
Wells Fargo analyst Ken Gawrelski noted: "It is no surprise that Instacart is exploring strategic alternatives, because the market has not rewarded its solid fundamental execution; since its IPO in September 2023, Instacart has underperformed the Nasdaq by 18 percentage points."
Citi Research analyst Ronald Josey expects Instacart's gross transaction value (GTV) to reach $42.3 billion this year, up 13.6% year over year, driven by 370 million orders and an average ticket of $114 — which "highlights the reach, frequency and user engagement of the service across its platform."
Based on these metrics, Wells Fargo's Gawrelski views Instacart as "an attractive strategic asset: strong end markets, steady growth, enviable margins, and only about 9x 2027 EBITDA."
This is echoed by Instacart's expanding list of strategic partners, which most recently includes Meta's Muse, Dollar General, Airbnb, Gopuff, Academy Sports and World Market.
Josey pointed out that as the internet evolves and personal AI agents become a daily habit, "we believe supplier scale and a large audience/subscriber base are the core of sustained usage and share gains, and Instacart has both." Wedbush's Ygal Arounian expects Instacart to capture about 60% of grocery intermediary e-commerce sales by 2027.
Instacart is expected to be priced at about $65 per share (the midpoint of a $16 billion to $17 billion valuation range), a premium of roughly 27% over Friday's closing price.
Instacart's strong growth has translated into its stock performance: its shares are up 42% year to date, while DoorDash shares have fallen 33.5% over the past year.
