Street Calls of the Week
On Wednesday, Mizuho (NYSE:MFG) Securities reiterated its positive stance on Uber Technologies Inc . (NYSE:UBER), maintaining an Outperform rating and a price target of $90.00. The reaffirmation comes amid investor concerns over potential moderating growth and the impact on incremental margins. Despite these worries, Mizuho sees the recent performance in mobility Gross Bookings (GB) as a sign of successful growth investments and a leading indicator for market share gains and margin expansion. According to InvestingPro data, Uber has demonstrated strong fundamentals with a 16.7% revenue growth over the last twelve months and maintains an overall "GREAT" financial health score of 3.17 out of 5.
Mizuho’s commentary highlighted that Uber’s results and guidance aligned with expectations, with a notable upside in mobility GB growth. This growth is viewed as a testament to the company’s strategic investments in its core business areas. The company’s strong market position is reflected in its impressive $42 billion in revenue over the last twelve months, with analysts expecting continued growth this year. However, the firm acknowledged that investors are currently opting to take profits due to fears of diminishing growth tailwinds from pricing strategies and the subsequent effects on the company’s incremental margins.
Additionally, the analyst pointed out that the overhang from robotaxi technology could intensify following the earnings announcement. This emerging sector poses a potential challenge to Uber’s traditional business model and may influence investor sentiment. Despite the current negative sentiment and potential cap on multiples expansion due to robotaxi concerns, Mizuho believes the stock’s current valuation presents an opportunity for investors. InvestingPro analysis suggests the stock is currently trading near its Fair Value, with over 10 additional exclusive insights available to subscribers.
Uber’s stock is trading at a discount compared to its peers, valued at 13 times its forecasted FY26 EBITDA, with an underlying GB growth rate in the mid- to high teens. Mizuho suggests that the recent pullback in Uber’s stock price could be a buying opportunity, although they caution that the potential for multiples expansion could be limited in the near term due to the aforementioned concerns regarding robotaxis.
In summary, Mizuho is standing by its Outperform rating and $90 price target for Uber, signaling confidence in the company’s ability to navigate through the current investor skepticism and industry challenges.
In other recent news, Uber Technologies Inc. has been the focus of several analyst reports. Canaccord Genuity maintained a Buy rating on Uber, setting a price target of $90, following the company’s fourth-quarter financial results which showed total bookings slightly surpassing market expectations. The company reported growth in both its Mobility and Delivery services, with a notable 25% year-over-year increase in driver supply.
Raymond (NSE:RYMD) James also maintained a Strong Buy rating on Uber, with a price target of $95, citing the company’s evolving partnership with Waymo and the slow progress in fully self-driving technology as potential drivers for market expansion. In contrast, Oppenheimer analysts maintained their Outperform rating with a steadfast price target of $85, highlighting Uber as their top pick especially as the fourth-quarter results approach.
Benchmark analyst Daniel L. Kurnos maintained a Hold rating on Uber shares, focusing on the company’s upcoming earnings report, while JMP Securities maintained a Market Perform rating on Uber without altering its price target. These recent developments indicate a generally positive outlook from analysts, despite the challenges and competition in the mobility sector.
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