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On Thursday, BofA Securities updated its outlook on Uber Inc. (NYSE: UBER), increasing the price target to $95 from the previous $93 while maintaining a Buy rating on the shares. According to InvestingPro data, Uber maintains a "GREAT" overall financial health score of 3.17/5 and stands as a prominent player in the Ground Transportation industry. The adjustment followed Uber’s recent earnings report, which revealed bookings and revenue figures surpassing Wall Street’s expectations. Uber’s bookings reached $44.2 billion, and revenue hit $12.0 billion, exceeding the anticipated $43.5 billion and $11.8 billion, respectively. The company’s EBITDA fell slightly short of projections, though InvestingPro analysis shows Uber trading at a P/E ratio of 15.3x with strong revenue growth of 18% over the last twelve months.
The report detailed that Uber’s Mobility Gross Bookings (GBs) were 1% higher than the Street’s estimates, showing a 24% increase excluding foreign exchange effects, consistent with the third quarter. Delivery services also performed well, coming in 2% above expectations. Uber’s investment in long-term growth during the quarter was noted to have impacted EBITDA. Notably, the Uber One subscription program expanded to 30 million global subscribers, a quarter-over-quarter increase of 5 million. Additionally, Uber Teen rides surged by 50% from the previous quarter, and Uber for Business saw a 50% year-over-year growth.
The BofA Securities analyst highlighted the company’s strategic growth initiatives, pointing out the positive return on investment from the increased marketing spend in the fourth quarter. With a robust return on assets of 21.89% and positive free cash flow yield, Uber’s growth investments appear well-supported by its financial performance. Discover more insights about Uber’s valuation and growth prospects with InvestingPro, which offers 8 additional exclusive ProTips and comprehensive financial analysis through the Pro Research Report, available for over 1,400 US stocks. In response to concerns from autonomous vehicle (AV) skeptics, Uber’s management emphasized that mobility growth had accelerated in key markets where competitor Waymo operates, such as San Francisco, Los Angeles, and Phoenix.
Uber’s recent performance indicates robust growth and an aggressive push to expand its market presence across various segments, including its subscription service, rides for teenagers, and corporate travel solutions. The company’s efforts in marketing and growth investments appear to be yielding tangible results, as evidenced by the uptick in user numbers and service expansion. Operating with a moderate debt level and maintaining a healthy current ratio of 1.07, Uber demonstrates strong financial discipline while pursuing growth opportunities.
In other recent news, Uber Technologies Inc . (NYSE:UBER) has seen several adjustments to its stock price targets by various analyst firms, all while maintaining their positive ratings. BTIG lowered the price target to $90, maintaining a Buy rating, citing strong demand for Uber’s services despite some softening in Mobility margins due to growth investments. Meanwhile, Evercore ISI decreased its price target from $120 to $115, while keeping an Outperform rating, pointing out a shift in Uber’s strategic approach towards achieving EBITDA and free cash flow goals.
Mizuho (NYSE:MFG) Securities maintained an Outperform rating and a $90 price target, highlighting successful growth investments despite investor concerns over potential moderating growth. Canaccord Genuity also kept a Buy rating and a $90 price target, following Uber’s Q4 financial results which demonstrated an uptick in growth for both Mobility and Delivery services.
Finally, Raymond (NSE:RYMD) James reiterated a Strong Buy rating and a $95 price target, expressing confidence in Uber’s evolving partnership with Waymo and the slow progress in fully self-driving technology. These recent developments indicate that despite some challenges, analysts remain confident in Uber’s future growth and profitability.
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