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Uber Technologies, Inc. (UBER), headquartered in San Francisco, California, provides a technology platform for users to access transportation and food ordering services. Valued at $127.50 billion by market cap, the company offers ride services and other forms of transportation, including public transit, bikes, and scooters. It also connects consumers with restaurants, grocers, other merchants, and shippers and carriers in the freight industry.
The ride-hailing major has outperformed the broader market over the past year. UBER has gained 24.7% over this time frame, while the S&P 500 Index ($SPX) has risen 17.8%. But in 2024, things turned unfavorable - UBER stock is down 4.9%, compared to the SPX’s 11.4% rise on a YTD basis.
Narrowing the focus, UBER’s outperformance is also apparent compared to the S&P 500 Technology Sector SPDR (XLK). The exchange-traded fund has gained about 15.6% over the past year. However, the ETF’s 4.6% gains on a YTD basis compare to the stock’s loss over the same time frame.
UBER’s overall performance can be attributed to the competitive landscape of ride-sharing and delivery services. Minimum wage laws for gig-worker delivery drivers in some cities have affected drivers, leading to a decline in delivery order volumes and an increase in courier wait time. Minnesota’s new law setting minimum pay rates for UBER and Lyft drivers is expected to increase the company’s costs. Meanwhile, news of UBER CEO Dara Khosrowshahi selling company stock worth $35 million also impacted investor confidence sending UBER shares down more than 7% on Jul. 17.
On May 8, UBER shares fell over 5% after the company reported its Q1 results. Its Q1 gross bookings rose 20% year over year to $37.65 billion, missing analyst estimates of $37.92 billion. The company reported 149 million monthly active platform consumers, reflecting a rise of 15% year over year. UBER expects Q2 gross bookings between $38.75 billion and $40.25 billion, falling short of the consensus estimates of $40.04 billion.
For the current fiscal year, ending in December, analysts expect UBER to report an EPS decline of 2.3% to $0.85 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in two of the last four quarters while missing the forecast on two other occasions.
Among the 41 analysts covering UBER stock, the consensus rating is a “Strong Buy.” That’s based on 35 “Strong Buy” ratings, three “Moderate Buys,” and three “Holds.”
This configuration is slightly more bullish than three months ago, with 34 suggesting a “Strong Buy.”
Needham analyst Bernie McTernan reiterated his “Buy” rating on UBER stock and maintained his price target of $90, implying a potential upside of 47.5% from current levels.
The mean price target of $87.08 represents a 42.7% premium to UBER’s current price levels. The Street-high price target of $145 suggests an ambitious upside potential of 137.6%.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
