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An Uber in the making? Here’s how Instacart’s stock could see better days ahead.

After just a few weeks of public life, shares of Instacart are already trading below their listing price, but numerous analysts see better days ahead for the grocery-delivery company, which does business as Maplebear Inc.

As a traditional waiting period lifted, allowing bank underwriters to launch coverage of Instacart shares
CART,
-2.82%,
most took bullish views in notes out Monday or over the weekend. At least six established coverage with buy-equivalent ratings, according to FactSet, while another took a more neutral stance.

Read: Klaviyo, Instacart and Arm Holdings’ stocks mixed as shine comes off recent crop of IPOs

“Once transitory growth headwinds are overcome, we think CART’s superior profitability and thriving ads business may warrant a valuation similar to UBER
UBER,
+2.83%,
” Piper Sandler’s Alexander Potter wrote as he established an overweight rating and $36 target price on the shares.

Potter acknowledged that growth at Instacart has slowed down in a big way coming out of the pandemic, which had driven heightened interest in grocery delivery. But Instacart’s growth, which currently trails that of other gig-economy services, could reaccelerate, in his view. In the meantime, Potter said the company’s “superior margins” help it stand out in an uncertain macroeconomic environment.

Citi Research’s Ronald Josey saw margin opportunities as well, noting that “improving order efficiencies, growth of its higher-margin advertising business, and the launch of new ad products should lead to margin expansion.”

He said he sees the potential for a growth reacceleration, fueled by chances to grow brand awareness and leverage its network of some 600,000 shoppers.

He rated the stock a buy with a $34 target price.

Instacart IPO: 5 things to know about the app that’s looking to ride a ‘massive digital transformation’ in grocery shopping

Baird’s Colin Sebastian cheered other ways that Instacart has differentiated itself.

“We believe Instacart’s data-centric technology platform built specifically for grocery provides important strategic advantages, while most food retailers are unlikely or unable to recreate similar internal e-commerce capabilities,” he wrote, while setting an outperform rating and $31 target price on the stock. “Instacart’s strong data orientation also provides unique insights into customer behavior, demand forecasting, and pricing trends.”

Further, he said he’s impressed with the company’s advertising business, which he thinks has appeal to consumer-packaged-goods companies.

Wedbush’s Scott Devitt, however, took a more measured view.

“While we hold a favorable view of the business and management team, we believe competitive dynamics in the industry will limit Instacart’s long-term growth potential as the company faces pressure from retailers outside of its network, other intermediary platforms, and emerging first-party services from leading partners,” he wrote, as he launched coverage with a neutral rating and $28 target price.

See also: Instacart has a tougher path ahead, analyst warns as stock sputters

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