Instacart IPO Stock Analysis With Alejandro Salcedo

Instacart IPO Stock Analysis With Alejandro Salcedo

Alejandro and Michelle discussed Instacart, a grocery delivery and pickup service, which just became a public stock!

Instacart’s IPO happened on September 19 with ticker symbol CART on the Nasdaq. Its Initial Public Offering was priced at $30 per share to give it an initial $10 billion valuation.

Instacart was formerly known as Maplebear, and it offers a subscription model with millions of members. While there was much excitement surrounding its public market debut, the new stock has faced volatility.

However, Alejandro and I focused more so on Instacart’s business fundamentals in the spirit of Warren Buffett-style investing.

Instacart is a delivery platform that connects retailers like grocery stores with shoppers on behalf of paying consumers. Customers may either pickup the goods or receive delivery.

Alejandro explained Instacart’s sources of income which include fees to retailers and customers, plus advertising revenue which is a growing income source.

We reviewed the potential strengths and weaknesses of Instacart’s business model, which faces similar tailwinds and headwinds as Uber and other delivery/ecommerce platforms.

While Instacart has been ceding some market share to Doordash and Uber, they are still dominating US digital grocery sales among delivery intermediaries.

Alejandro shared the economics behind Instacart’s transactions with how much revenue they generate, how much the average revenue per order is, and the total fees it collects.

We discussed several questions for Instacart that anyone evaluating this business should consider.

It was really kind of Alejandro to present his company analysis with me, so thank you my friend!

If you’re interested in learning how to take control of your finances and start becoming an investor like Warren Buffett, check out my free PDF guide.

I look forward to making more investor friends! Add me on Instagram: michellemarki