Instacart's Total Addressable Market Is Massive Despite Grocery Category Being Slower To Shift Online, Says Bullish Analyst

Core Viewpoint - Seaport Global analyst Aaron Kessler initiated coverage on Maplebear Inc (Instacart) with a Buy rating and a price forecast of $62.00, highlighting the potential in the grocery sector despite a slower transition to online shopping [1][2]. Industry Overview - The grocery sector is the largest in retail, generating over$1.1 trillion annually in the U.S. [1] - Approximately 13% of grocery orders occur online, indicating a slower shift to eCommerce compared to other categories [1]. Company Positioning - Instacart has partnered with over 85,000 stores across 1,500 retail banners, representing more than 85% of the U.S. grocery market by December 31, 2023 [4]. - Instacart holds over 50% market share for small baskets (under $75) and more than 70$75), with large baskets accounting for about 75% of grocery spending in the U.S. [5]. Growth Strategy - Instacart focuses on selection, affordability, quality, and convenience to drive sustained growth despite the slower market transition [2]. - Long-term revenue growth is anticipated to be in the high single digits, driven by greater customer adoption, expanding retail partnerships, and increased spending on brand advertising [6]. Financial Outlook - Adjusted EBITDA margins are expected to exceed 35% over time, supported by efficiencies from scale and controlled investment levels [6]. - As of the last check, CART shares are trading higher by 1.01% at $50.21 [6].