Street Calls of the Week
On Wednesday, Evercore ISI made adjustments to its outlook on Uber Technologies Inc . (NYSE:UBER), citing a modest reduction in estimates and a revised price target. Analysts at the firm decreased their price target from $120.00 to $115.00 while maintaining an Outperform rating on the company’s shares. According to InvestingPro data, Uber has demonstrated strong financial performance with revenue reaching $41.95 billion in the last twelve months.
The revision follows Uber’s latest quarterly earnings report, which Evercore ISI described as "In-Lineish." The report indicated a decrease in incremental margins, which led to a 7% intraday drop in Uber’s stock price. Despite this, Evercore ISI considers the results to be largely consistent with Uber’s three-year plan. InvestingPro analysis shows the company maintains a healthy gross profit margin of 32.7% and has achieved profitability over the last twelve months.
Evercore ISI pointed out a shift in Uber’s strategic approach, noting the company is now focusing on achieving EBITDA and free cash flow goals while also maximizing bookings. This is a change from the previous goal of maximizing EBITDA while focusing on bookings growth. According to Evercore ISI, this new direction is sensible given the challenges surrounding the anticipation of robotaxi services and Uber’s strong track record of profitability growth.
The implications for competitors Lyft Inc. (NASDAQ:LYFT) and DoorDash Inc. (NYSE:NASDAQ:DASH) are seen as neutral to modestly positive, suggesting that the industry demand trends remain favorable. Evercore ISI reaffirmed its confidence in Uber by naming it one of their top large-cap long recommendations and encouraged investors to consider buying the stock during the current correction.
The firm also highlighted that Uber is trading at near trough valuation levels, which they refer to as "DHQ status," indicating a potentially attractive entry point for investors. Evercore ISI’s stance suggests that despite the reduction in the price target, their overall view on Uber’s market position and growth prospects remains positive. InvestingPro data supports this outlook, showing an overall Financial Health score of "GREAT" and revealing that the company is currently trading close to its Fair Value. Subscribers to InvestingPro can access 10 additional key insights and a comprehensive Pro Research Report that provides deep-dive analysis of Uber’s financial position and growth prospects.
In other recent news, several analysts have maintained their positive outlook on Uber Technologies Inc., despite potential challenges from emerging sectors like robotaxi technology. Mizuho (NYSE:MFG) Securities and Canaccord Genuity both reiterated their confidence in Uber, maintaining an Outperform and Buy rating respectively, with a $90 price target. The firms highlighted Uber’s successful growth investments and strategic pricing strategies as key contributors to its recent performance.
Raymond (NSE:RYMD) James also reaffirmed its strong confidence in Uber, maintaining a Strong Buy rating and a $95 price target. The research firm believes that Uber’s evolving partnership with Waymo and the slow progress in fully self-driving technology could pivot the company’s narrative from disruption to market expansion. Oppenheimer analysts maintained their Outperform rating on Uber with a steadfast price target of $85, highlighting the company as their top pick.
Benchmark analyst Daniel L. Kurnos maintained a Hold rating on Uber shares, without changing the previously set price target. Kurnos expressed a cautious stance on the mobility segment while indicating optimism about its upside potential compared to the delivery segment.
These are recent developments, suggesting a generally positive outlook from analysts for Uber’s strategic direction and its potential for growth in the evolving market landscape. However, it’s important to remember that these are projections and actual results may vary based on a multitude of factors.
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