A comprehensive overview of the financial statements of Instacart.
By Chris Henry
They have a very impressive marketplace of grocery stores connected consumers with for delivery. I’ve personally used the service and was surprised how fast the deliveries were. Compared to Walmart's 19.99 Delivery fee, CART’s 7.99 fee is 60% lower. I have also seen many people use it while traveling. Statement Analysis
Revenue Growth:
6 Months end Top Line Rev increases 11.39%
Operating expenses increased rapidly, this did NOT alarm me at first because of the expenses recorded for research and development and sales and marketing. With an early stage company and IPO this is normal. What is concerning is the very large proportion of general and administrative costs going up. Must do further research into management to see efficiency.
Net income decreased from 242 to 191 21%.
Could see them getting bought out for a premium. Insiders do have a large stake in the company however.
Debt to Equity Ratio = total liabilities / stockholders equity = 806 / 3039 = 27%
This means that for every dollar in assets they have 0.27 cents in liabilities.
Low debt which is good economic downturns.
1.4 B billion in cash.
Book Value Per Share: Stockholders equity - preferred equity / Outstanding shares = 2,862 / 290 million = $9.87 (used potential dilution outstanding shares)
Cash Flow Statement 10-Q
6 Month End Cash Flow Operating Activities:
242 to 349 = 44% increase
Bought 1 Billion of their stock back. Roughly 9.45% of the company back.
Calculating estimate p/e ratio
Net income / outstanding = 400 m / 290 m = 1.38 (estimate EPS)
P/E ratio = price per share / EPS
Estimated 2024 P/E 42 / 1.38 = 30
This means that you are paying $30 for every $1 of the company's earnings.
Current Price: $42.76
Enterprise Value calculation. EV
Market Cap + Debt - Cash
11B + 0 - 1.4B
9.6 Billion Company ?
Net 191 million 6 mo end
So estimate 400 million this year.
Paying 24x net for this company.
They have a great balance sheet and finding new ways to way to grow revneu including advertising. The main one is still transaction based from orders but would like to continue to watch the growth in advertising. Could see them getting bought out for a premium. Insiders do have a large stake in the company however. I am a bit uncertain about the moat they have considering the valuation they have. I do not have a position but could see it doing well if operating expenses are in control.
