Is Instacart’s Recent Partnership Expansion Reflected in Its Current Valuation?

• Wondering if Maplebear at around $44.95 is still a smart buy or if the easy money has already been made? You are not alone, and that is exactly what we are going to unpack here.
• Over the last month the stock is up about 8.5%, building on a 7.0% gain over the past year. This suggests sentiment is quietly shifting even if the move has not been dramatic week to week.
• Recent headlines have focused on Maplebear expanding partnerships and deepening its footprint in key US markets, which helps explain why investors are starting to re rate the business. There has also been growing attention on its role in the broader shift toward on demand consumer services, adding both excitement and new questions about long term profitability.
• Right now the company scores a 3 out of 6 on our valuation checks, which suggests pockets of undervaluation but not a slam dunk across every metric. Next we will walk through the main valuation methods and then finish with a more holistic way to think about what Maplebear is really worth.

Find out why Maplebear's 7.0% return over the last year is lagging behind its peers.

Approach 1: Maplebear Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company is worth by projecting the cash it can generate in the future and then discounting those cash flows back to today in dollar terms.

For Maplebear, the 2 Stage Free Cash Flow to Equity model starts with last twelve month free cash flow of about $878.8 million, then applies analyst forecasts for the next few years and extrapolates further growth beyond that. By 2035, free cash flow is projected to be just over $1.2 billion, with the later years based on gradually slowing growth estimates from Simply Wall St rather than explicit analyst targets.

When all those projected cash flows are discounted back to the present, the model arrives at an intrinsic value of roughly $94.63 per share. Compared with the current share price of about $44.95, the DCF implies the stock is trading at roughly a 52.5% discount. This suggests potential undervaluation if the cash flow assumptions prove accurate.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Maplebear is undervalued by 52.5%. Track this in your watchlist or portfolio, or discover 918 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Maplebear.

Approach 2: Maplebear Price vs Earnings

For profitable companies like Maplebear, the price to earnings ratio is a practical way to think about valuation because it links what you pay for each share directly to the profits the business is generating today. Investors generally accept that faster growth and lower risk justify a higher PE, while slower or more uncertain earnings growth usually deserves a lower, more conservative multiple.

Maplebear currently trades on a PE of about 23.37x, which sits above the broader Consumer Retailing industry average of roughly 21.79x but below the peer group average of around 27.33x. Simply Wall St also calculates a proprietary Fair Ratio of 18.15x for Maplebear. This Fair Ratio estimates what a reasonable PE should be once you factor in the company’s earnings growth outlook, profitability, industry, market cap and key risks, making it more tailored than a simple comparison with peers or the sector.

Because Maplebear’s actual PE of 23.37x is clearly higher than the Fair Ratio of 18.15x, the multiple based view suggests the shares are trading at a premium to what these fundamentals would justify.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1460 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Maplebear Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of a company’s story with the numbers that sit behind its fair value, including your expectations for future revenue, earnings and margins.

A Narrative on Simply Wall St is your own structured story about a company, where you spell out what you think will drive the business, translate that into a financial forecast, and then arrive at a fair value that you can directly compare with today’s share price to help inform a decision on whether to buy, hold or sell.

Because Narratives live inside the Simply Wall St Community page, they are easy to create and follow, are used by millions of investors, and are dynamically updated as new information like earnings releases, news or guidance changes the underlying forecasts and therefore the fair value estimate.

For Maplebear, for example, one bullish Narrative might argue that expanding retail partnerships, AI driven efficiencies and buybacks justify a higher growth outlook and a fair value above $67. In contrast, a more cautious Narrative might focus on competition, regulatory risk and margin pressure to arrive at a fair value closer to $42. Seeing where your own view fits between these helps anchor your decision making around a clear, data backed story rather than a single static metric.

Do you think there's more to the story for Maplebear? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com