What would be needed for your DCF model to produce a price of $$42$ per share $($the high price on the first day of trading$)?$ Specifically, by changing your revenue growth or cost assumptions, find a set of assumptions that would produce a stock price of approximately $$42.$ You should comment about the reasonableness of these assumptions in your writeup. $[$NOTE: There are many combinations of assumptions that will work$-$there is no 'right' answer here.$]$

An alternative way to value a stock is by use of multiples. $[$NOTE: There is no reason to expect the multiples$-$based valuation to agree with your DCF$-$based valuation because different assumptions underly the two methods.$]$

a$.$ Multiples valuation should be forward looking, so start with Instacart's Base Case ${2024}_{?}$ projected Earnings Before Interest, Taxes, Depreciation and Amortization $($EBITDA$,$ a standard cash flow measure$)$ from your DCF and compute its total Enterprise Value$-$toEBITDA ratio. Enterprise Value is Equity Value $-$ Cash $+$ Debt $($post$-$IPO, Instacart has $$2\mathrm{.}8$ billion in cash and not enough debt to be material$).$

b$.$ Compare this with the ratios for: Uber $($EV$/$EBITDA $=16\mathrm{.}9),$ DoorDash $(19\mathrm{.}3),$ and a global mobility comparison set $(14\mathrm{.}9).$ Be sure to comment on whether Instacart's multiple seems reasonable given its growth prospects.

c$.$ If you were to apply the comparison multiples to Instacart's $2024$ EBITDA, what share prices would that imply? $($Take $2024$ EBITDA x Multiple as your new total Enterprise Value, convert to equity by adding in the cash and calculate the share price from there.$)$

Overall, what is your estimate of what Instacart's stock price should be and what range of valuations do you think are reasonable? Defend your conclusion by discussing and referencing the outcomes of the valuations in steps $5$ to $8,$ as well as your thoughts on Instacart's competitive landscape. You will have arrived at a range of prices, and you will need to take a stand on how to interpret this range and which prices and assumptions to weigh more heavily.

Your answer should take the form of a writeup $($maximum $2$ single$-$spaced pages$)$ that refers to spreadsheet exhibits $($the exhibits do not count toward the $2-$page limit$).$ Do NOT write a chronological history of what you did to solve this case and do NOT write it as #$5)$ answer, #$6)$ answer, etc. You are supposed to explain the highlights of your approach, synthesize what you found, draw a conclusion, and defend it$.$

This is a group case. Submission is electronic $($and MUST also include your Excel file ending in $.$xlsx$).$