Investing.com -- Ibotta shares are down more than 40% before the opening bell. The company received downgrades from Raymond James and Citi following Ibotta’s weaker-than-expected fourth-quarter results and a disappointing first-quarter outlook. Analysts note ongoing advertising supply constraints and sales execution challenges impacting near-term performance.

Raymond James cut its rating to "Market Perform," pointing to offer supply shortfalls driven by measurement issues, sales execution missteps, and the timing of consumer packaged goods budget agreements.

"We see the proving-out period likely to take quarters, not weeks or months," Raymond James analysts wrote, adding that investor confidence may take time to recover after four consecutive earnings misses since Ibotta’s April 2024 IPO.

Citi also downgraded the stock to "Neutral," citing continued advertising supply challenges that cloud revenue visibility. While the firm remains positive on Ibotta’s long-term positioning with retail partners like Walmart (NYSE: WMT ) and Instacart (NASDAQ: CART ), it expects budget allocation cycles and a sales force rebuild to take time.

Both firms noted progress on Ibotta’s new measurement platform and efforts to improve sales execution, but flagged near-term risks as the company works to regain advertiser confidence.