Maplebear Earnings: Shares Plunge Amid Expectations for Slower Profit Growth

No-moat Maplebear (Instacart) delivered a solid fiscal 2024 fourth quarter as top-line growth of 10% closely aligned with our 9% forecast, and adjusted EBITDA margin expanded nearly 400 basis points to 28.5%. However, shares plunged 10% in after-hours trading as management’s outlook for the first quarter of fiscal 2025 implied a more muted benefit from operating leverage relative to the prior year. The midpoint of management’s guidance implies gross transaction value and adjusted EBITDA growth of about 9% and 14%, respectively, which contrasts with the firm’s fiscal 2024 full-year results that saw GTV expand 10% and adjusted EBITDA grow by a prodigious 38%. We were already expecting the benefits of operating leverage to abate in coming years, and thus anticipate raising our $39 fair value estimate by a mid-single-digit percentage due to the time value of money and a slight uptick to our midcycle EBITDA margin forecast that currently sits in the mid-20% range.