Instacart, the American delivery company based in San Francisco is undervalued, according to Wolfteam Ltd.'s projections and estimates.
Instacart, with 2.55 billion USD revenue, growing at 39.09 % and net profit margin of 16.78 % for 2022 has an intrinsic value of 14.2 billion USD. Instacart can command much higher Price/Sales multiple than Amazon, because it is consistently profitable with average net profit margin of 2 % for the last 4 years, excluding a year with an extraordinary high negative net profit margin. For the last three reported calendar years Instacart's net profit margin is 3 % on average. Instacart's current market capitalization is 6.71 billion USD.
Mark Andreesen once said that 'software is eating the world'. Nowhere this is more true than in the online delivery business where Instacart is active in. The online delivery business is basically a monopoly market dominated by Amazon. Amazon's market capitalization is 1.585 trillion US dollars currently. In Amazon's valuation its very profitable cloud computing business plays a large role, of course. But the global online delivery market is to reach 1 trillion USD in yearly revenue in the next 7 years. The online delivery has constantly grown in the last 15 years.
And Instacart is a viable challenger in online delivery with a sound business model, profitable business model at that. When Instacart did its IPO months ago at the opening of Instacart's stock trading, Instacart was glaringly undervalued. Since then, Instacart lost 20 % of its IPO market capitalization. So Instacart is more undervalued now.
In short, Instacart is undervalued on its profitable business model, the growth of online trade, the large business opportunity in global online delivery due to Amazon's monopoly and the current undervaluation, according to Wolfteam Ltd. of Instacart, based on Price/Sales ratio and other comparable valuation metrics.
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