DoorDash shares fell 6% despite a lower earnings multiple for Instacart
At the reported $17bn price, Instacart costs about 13 times annualised adjusted EBITDA, compared with 19 times for DoorDash. An all-stock deal would lift DoorDash's adjusted EBITDA per share by about 9%.
DoorDash would buy Instacart at a cheaper earnings multiple than the one the market gives DoorDash. Yet DoorDash fell 6.1% to $168.44 on Monday, while Instacart rose 7.9% to $60.88.
The valuation leaves other concerns: the purchase price exceeds DoorDash's cash, customers are concentrated in three retailers, and Instacart has already paid $60m to a regulator.
DoorDash is in advanced talks to buy Instacart in a deal valuing the grocery delivery platform at about $17bn, Reuters reported on Monday. A deal may be finalised as soon as Wednesday, with no guarantee.
The Wall Street Journal first reported the talks. Reuters put Instacart's market value at about $13bn on Friday's close, so $17bn is an equity price.
The valuation and per-share calculation
Instacart's second quarter 10-Q shows adjusted EBITDA of $313m, or $1.25bn a year. That is profit before interest, tax, depreciation and stock pay.
Take $17bn and subtract $0.9bn ($885m) of Instacart cash and securities. That cash, with no borrowings, would fund about 5% of the price. The enterprise value, the price of the whole business, is $16.1bn, or 12.9 times that annual profit.
DoorDash's own 10-Q gives adjusted EBITDA of $914m, or $3.66bn a year. Its enterprise value is $69.5bn after cash and convertible debt, which is 19.0 times.
At the reported 17 billion dollar price, Instacart would be valued at about 12.9 times its annualised second quarter adjusted EBITDA, against about 19.0 times for DoorDash at Monday's close.
View data
| Valuation case | Enterprise value divided by second quarter adjusted EBITDA times four |
|---|---|
| Instacart at Thursday 22 October close | 9.1 |
| Instacart at Friday 23 October close | 10 |
| Instacart at Monday 26 October close | 10.8 |
| Instacart at the reported 17 billion dollars | 12.9 |
| DoorDash at Monday 26 October close | 19 |
Paying 12.9 times with stock that trades at 19.0 times adds to profit per share. If the whole price were paid in stock, DoorDash would issue about 101m shares.
Adjusted EBITDA per share would rise about 9%, from $8.44 to $9.19. After stock pay, which both companies add back, the gain is about 5%. The 6% fall therefore needs another explanation.
Deducting stock pay keeps the gap, at 24.4 times for Instacart and 30.8 times for DoorDash. On Monday DoorDash lost $4.7bn of market value and Instacart gained $1.1bn, a net loss of $3.7bn for the pair.
Spread over about 257m Instacart shares, counting 19m unvested stock units, $17bn works out at about $66 a share. That figure is our calculation rather than a quoted price.
It is 28% above Thursday's $51.68, the last close before news of a sale exploration broke on Friday. Volume that day jumped to 16.1m shares from 3.0m. Monday's $60.88 is 92% of $66.
What the premium buys
The premium buys advertising and software more than delivery. Instacart's "advertising and other" line brought in $297m, 28.5% of revenue, and grew 16.5% against 13.2% for transaction revenue.
That line also holds the software subscriptions that retailers pay for Instacart Enterprise storefronts.
The mix gives Instacart a 30% adjusted EBITDA margin, against 20.5% at DoorDash. Net income was $111m in the quarter.
Orders grew 9% to 90.3m on gross transaction value (GTV), the total value of goods ordered, of $10.35bn. Per dollar of volume the two earn about the same: 3.0% of GTV at Instacart and 2.8% of Marketplace GOV at DoorDash.
The premium looks expensive for 9% order growth, although Instacart's profit helps justify it. Delivery companies are expanding into grocery and retail to grow beyond restaurant delivery, with DoorDash buying Deliveroo and Uber buying Postmates and Delivery Hero.
Instacart also filed an 8-K on Monday. Its board decided on 25 October to wind down Caper Cart, its smart shopping cart business.
The charges run from $55m to $80m, mostly in the fourth quarter, with $30m to $50m of it in cash. Savings are to go into "strategic growth initiatives". Even the top cash figure is under 0.3% of the $17bn price.
Retailer, financing and regulatory risks
Customer concentration is the first risk. Instacart's 10-Q says its top three retailers supplied about 43% of gross transaction value in 2025. If the three are equal, losing one would cost about a seventh of Instacart's volume.
The same filing names DashMart (owned by DoorDash), Fresh Direct (owned by Getir) and Gopuff among platforms that own inventory. These "may include existing retailers on Instacart, which could eventually eliminate their need to partner with us".
The 10-Q also names Uber as the partner whose restaurant delivery runs on Instacart's platform. A person familiar with the matter told Reuters that Instacart's talks with Uber are no longer active. The buyer that stayed is the one that competes with those retailers.
Financing the purchase is the second risk. DoorDash held $6.2bn of cash and investments at 30 June, so $17bn leaves about $10.8bn to find from stock or debt.
All stock would mean 101m new shares, 23% of the 433m now outstanding, and about 19% of the combined company for Instacart holders. BTIG models 65% stock and 35% cash, which is 66m shares and about $6bn of cash, nearly all of DoorDash's balance.
DoorDash stock is down 25.6% this year, making payment in shares expensive for the buyer. For scale, $17bn is 4.6 times the $3.7bn DoorDash paid for Deliveroo.
The regulator is the third risk. Instacart paid $60m in January 2026 under an FTC consent order. It became final on 13 January and covers its marketing and Instacart+ membership practices.
Any deal would face review under the Hart-Scott-Rodino Act, the US merger notification law. That starts with a 30 day waiting period, which a second request can extend.
DoorDash trades at a higher multiple because it grows faster. Its orders rose 27%, helped by Deliveroo, which closed in October 2025, against 9% at Instacart.
The purchase would bring that slower growth into DoorDash at a multiple of 13 times, while DoorDash itself trades at 19 times.
The next disclosures
If the signing comes on Wednesday 28 October, as Reuters reported was possible, the mix of stock and cash will be public. DoorDash reports third quarter results on 4 November, and Instacart follows on 5 November.
Instacart's report is the first test of the 13 times price, because the margin that justifies it rests on advertising. Its advertising line must again grow faster than the 13.2% pace of transaction revenue. If it falls to that pace, the 30% margin behind the price stops widening.