REFILE-Instacart shares soar as upbeat forecast tempers competition fears

By Angela Christy M

Feb 13 (Reuters) - Instacart's shares surged as much as 19% on Friday after the online grocery delivery company, a go-to for millions of Americans, issued an upbeat first-quarter forecast that eased worries about growing competition.

Shares of the company CART.O, formally known as Maplebear, jumped to $39.60 in morning trading, on track for their best day since its 2023 listing.

Instacart ended the fourth quarter with gross transaction value (GTV), or the total value of goods ordered on its platform, recording its strongest growth in three years.

Quarterly GTV jumped 14% from a year earlier to $9.85 billion, aided by efforts to sharpen product selection, improve quality and keep the service affordable for budget-conscious shoppers.

"Though often overlooked for CART, it is not trivial to sustain double-digit growth in the brutally competitive grocery category against scaled giants such as Walmart, DoorDash and Uber Eats," said Michael Morton, analyst at MoffettNathanson Research.

Last year, the company lowered the minimum order value for its Instacart+ service to $10 to better compete for smaller baskets, as rivals aggressively move into low-ticket groceries. Instacart+ is the company's loyalty program.

DoorDash DASH.O and Uber Eats UBER.N have been expanding their grocery and convenience offerings, while Amazon is testing delivery in under 30 minutes.

On Thursday, Instacart executives said while rivals are pulling in smaller, fill-in orders, Instacart continues to win in larger baskets over $75, which make up roughly three-quarters of the U.S. digital grocery market.

The company now expects first-quarter GTV between $10.13 billion and $10.28 billion, above Wall Street estimates.

Instacart's forward price-to-earnings multiple, a common benchmark for valuing stocks, is 14.44, compared to 45.71 for DoorDash.