Since October 2025, Instacart has been in a holding pattern, posting a small loss of 1.8% while floating around $38.61.

Is now the time to buy CART? Find out in our full research report, it’s free.

Why Are We Positive On CART?

Powering more than one billion grocery orders since its founding, Instacart (NASDAQ: CART) is an online grocery shopping and delivery platform that partners with retailers to help customers shop from local stores through its app or website.

1. Elite Gross Margin Powers Best-In-Class Business Model

A company’s gross profit margin has a significant impact on its ability to exert pricing power, develop new products, and invest in marketing. These factors can determine the winner in a competitive market.

For online marketplaces like Instacart, gross profit tells us how much money the company gets to keep after covering the base cost of its products and services, which typically include payment processing, hosting, and bandwidth fees in addition to the costs necessary to onboard buyers and sellers, such as identity verification.

Instacart has robust unit economics, an output of its asset-lite business model and pricing power. Its margin is better than the broader consumer internet industry and enables the company to fund large investments in new products and marketing during periods of rapid growth to achieve higher profits in the future. As you can see below, it averaged an excellent 74.4% gross margin over the last two years. That means Instacart only paid its providers $25.56 for every $100 in revenue.

2. EBITDA Margin Reveals a Well-Run Organization

EBITDA is a good way of judging operating profitability for consumer internet companies because it excludes various one-time or non-cash expenses (depreciation), providing a more standardized view of the business’s profit potential.

Instacart has been a well-oiled machine over the last two years. It demonstrated elite profitability for a consumer internet business, boasting an average EBITDA margin of 27.7%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

3. Increasing Free Cash Flow Margin Juices Financials

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

As you can see below, Instacart’s margin expanded by 14.4 percentage points over the last few years. This is encouraging because it gives the company more optionality. Instacart’s free cash flow margin for the trailing 12 months was 24.3%.

Final Judgment

These are just a few reasons why we think Instacart is a great business, but at $38.61 per share (or 7.5× forward EV/EBITDA), is now the right time to buy the stock? See for yourself in our comprehensive research report, it’s free.

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