Goldman Sachs analysts initiated research coverage of Ibotta (IBTA) with a Neutral rating and a 12-month price target of $103, saying they see the stock as “positively levered to a number of long-term secular growth themes within our sector across both digital advertising and grocery.”
“In the current market environment, we see debates around the overall macroeconomic impact on digital advertising, the pace/cadence of 3P redeemer additions and the impact of the Walmart partnership as being the biggest potential drivers to upside/downside volatility in the coming year,” analysts wrote.
Simultaneously, JMP Securities analysts also assumed coverage on IBTA, with a Market Outperform rating and a $130 price target. The investment firm believes that the technology company is transforming the CPG promotion industry with the Ibotta Performance Network.
Their positive outlook is driven by Ibotta's growing scale, encompassing over 2,400 CPG brands, 850 retail partners, and exposure to over 200 million consumers. They believe that increased consumer reach will attract more brands, enhance coverage, and draw in more merchants.
“With high unit economics and an ~$200B opportunity within the CPG category, we believe Ibotta can drive significant free cash flow for shareholders,” the JMP team noted.
Analysts at Citi Research started coverage on IBTA as well, rating it as a Buy and assigning a target price of $120.
The Wall Street firm views the company as the leader in digital promotions with 4x the digital promotions of its nearest competitor and a 7x ROAS for its CPG partners, and believes it is well-positioned for further growth with expanding retailer networks and potential for greater brand penetration.
“To be clear, it remains early days in the build-out of its Ibotta Performance Network (IPN) and the mix-shift from Ibotta’s core D2C app, but with Walmart now fully live and newer retailers joining, we believe more brands are likely to join the platform given Ibotta’s growing scale and reach (200M+ consumers),” Citi analysts said.
“At scale, we believe Ibotta can deliver 50%+ EBITDA margins and believe there is likely upside to projections as Ibotta’s network expands,” they added.
IBTA shares rose more than 2% on Monday.