Street Calls of the Week
On Wednesday, Canaccord Genuity reaffirmed their positive stance on Uber Technologies Inc . (NYSE:UBER), maintaining a Buy rating and a price target of $90.00. According to InvestingPro data, analyst consensus remains strongly bullish with price targets ranging from $72 to $120, suggesting significant upside potential. The company’s overall financial health score is rated as "GREAT" by InvestingPro analysts. The endorsement follows Uber’s release of its fourth-quarter financial results, which showed total bookings slightly surpassing market expectations. The company’s strong performance is reflected in its impressive financials, with revenue reaching $42 billion in the last twelve months and showing a robust 16.7% growth rate. The company experienced an uptick in growth for both its Mobility and Delivery services, driven by a 25% year-over-year increase in driver supply, product innovation, and price segmentation strategies. For deeper insights into Uber’s financial performance, InvestingPro subscribers can access comprehensive analysis and over 10 additional key insights.
Uber’s Delivery segment saw continued audience growth, marking the seventh consecutive quarter of acceleration, and improved its category position in each of its top ten countries. The growth is partly credited to the expansion of Uber One, the company’s membership program, which now boasts 30 million members, a 5 million increase from the previous quarter and a 60% rise from the previous year. This growth has contributed to Uber’s strong profitability metrics, with a gross profit margin of 32.7% and positive earnings of $2.02 per share in the last twelve months.
In their commentary, Canaccord analysts highlighted Uber’s insights on the robotaxi market. Uber’s management believes the company is well-placed to collaborate with original equipment manufacturers (OEMs) to manage fleets, generate service demand, and tackle operational challenges in ridesharing. Despite the first-quarter bookings guidance falling short of expectations due to foreign exchange headwinds and the impact of the leap year, Canaccord views the current dip in Uber’s share price as an opportunity for investors. The firm is confident in Uber’s sustained core bookings growth on an FX-neutral basis and its trajectory towards meeting three-year financial targets. With a strong return on equity of 36% and operating with moderate debt levels, Uber demonstrates solid financial fundamentals that support its growth strategy.
In other recent news, Uber Technologies Inc. has been the subject of various analyst evaluations and has initiated a significant lawsuit. Raymond (NSE:RYMD) James maintains a strong buy on Uber, citing the company’s evolving partnership with Waymo and the slow progress in fully self-driving technology as potential drivers for market expansion. The firm anticipates an EBITDA of $1.8 billion for both the fourth quarter and the first quarter, aligning with consensus estimates.
Oppenheimer also maintains an outperform rating on Uber, viewing the development of Robotaxi technology as a potential market expander. Benchmark and JMP Securities hold a more cautious stance, maintaining a hold and market perform rating respectively, with both firms citing the increasing competition from Waymo as a factor in their assessments.
In legal developments, Uber has initiated a lawsuit against a consortium of law firms, medical practitioners, and pain-management clinics, alleging a conspiracy to exploit New York’s no-fault insurance policies through fraudulent activities. These recent developments mark a period of both strategic evaluations and legal challenges for Uber.
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