The quiet period following Uber’s (UBER) IPO is finally over, and Wall Street analysts are bulled up on the stock, according to the coverage being released Tuesday.
There are currently 21 Buy ratings on Uber stock, 5 Holds and zero Sells, according to data compiled by Bloomberg. The average 12-month price target on the stock is $53.70, which is nearly 33% higher from Monday’s closing price.
Following Uber’s rather disappointing IPO on May 10, the stock has been on a precipitous decline. After pricing at $45, shares have tumbled 10%, as of Monday’s close. Furthermore, on Thursday, Uber reported its first quarterly earnings report since becoming a public company. Results were rather mixed, as the ride-hailing giant reported revenue of $3.1 billion, up 20% year-over-year. However, the company still saw steep losses totaling $1 billion, which were in line with analyst analyst estimates.
Despite the poor performance and mixed earnings results, Wall Street is showing support for Uber. Here’s what some are saying.
Cowen: Outperform; $58 price target
“Uber is well-positioned to grow its Ridesharing & Eats units as positive secular trends drive more users and frequency, yielding 20%+ annual bookings growth ’19E-‘24E. Our unit contribution profit analyses suggest Ridesharing biz is profitable per trip, while Eats per trip losses will shrink as the biz scales; we est. Uber is EBITDA positive by ‘22.”
Mizuho: Buy; $50 price target
“Uber has a category-leading position in ridesharing, which makes up nearly 70% of its overall TAM of nearly $6tn. The current intense competition will likely rationalize over the next few years due to continued consolidation and listings of private peers. As a result, we believe Uber has ample room to gain operating leverage from economies of scale. We expect Uber to be EBITDA positive by 2022 and achieve a 10.4% margin in 2023.”
Loop Capital: Buy; $54 price target
“UBER is the leading global brand in the rapidly expanding ridesharing market with dominant share in every major geography except China, Russia and S.E. Asia, where it has traded for equity stakes in each region’s leader. Category expansion has been successful to date as Uber Eats is seeing a rapid scale escalation and revenue ramp. We think both opportunities are open-ended and see potential for freight and other categories, notably autonomous vehicles. We think scale economies will shape industry structure and that high incremental margin on marketplaces will provide a generous return on investment spending over time. We think UBER will be a 25x forward P/E stock when it achieves its target model, which we forecast in 2028.”
RBC Capital: Outperform; $62 price target
“Uber is the leading global player in massive ridesharing & meal delivery TAMs, generating robust growth, with leading technologies, products & ops. We also see significant option value in new business units (e.g. Freight). We believe the market underappreciates UBER’s profit potential.”
BTIG: Buy; $80 price target
“We expect autonomous vehicles to begin to positively impact Uber and Lyft’s operating results within 5 years, and believe both companies are positioned to be primary beneficiaries of what could be one of the most disruptive forces across multiple industries over the next 10 to 20 years...We prefer Uber over Lyft because of the importance of their leading market share, global scale, willingness to leverage their platform across multiple industry categories, and more experienced management teams.”
Oppenheimer: Outperform; $55 12-month price target
“Uber has carved out a categorical market leader position in ridesharing (65% in most regions and 69% in the US) and online food delivery. Aside from the company’s leading technology, Uber boasts superior network liquidity compared to peers, with more than 93M global monthly active platforms customers. In our view, ridesharing (currently ~1% of TAM) and online food delivery (~15% of TAM) adoption are still underpenetrated globally, and we think Uber’s technology and network liquidity are better positioned than peers to capture additional market share.”
JMP Securities: Market Outperform; $54 price target
“We believe Uber’s size and scale, with 93M monthly average platform customers (MAPCs), 3.9M active drivers, in 63 countries and 700+ markets, creates significant scale advantage globally, particularly as it enters new markets and leverages its platform with newer products, such as Eats & Freight. And given the platform benefits experienced with Eats—MAPCs using both Rides & Eats typically have 2x the engagement—and Freight's logistics and technology benefits, we believe there are significant opportunities for Uber to leverage its core marketplace and logistics technology for new products and services.”
Goldman Sachs: Buy; $56 12-month price target
“Uber is the category leader creating what has become a disruptive and challenging market over the course of the last eight years. While we see mobility as a massive opportunity, the path to reaching it is far from a straight line. Though there are already very large companies across the various markets and services, we see long-term leadership in the space as far from settled and believe the risks in ownership across the space, as both the services and the competitors with in them mature, are significant. That said, we believe the risk/reward in owning the leader in this space is favorable.”
Bank of America Merrill Lynch: Buy; $53 price target
“Uber is a transformational company that should benefit from secular shifts to the sharing economy (Rides), time saving services (Eats), and more efficient marketplace evolution (Freight). Our thesis is based on: 1) Sector attractive with just 1% penetration of TAM, 2) With Uber & Lyft signaling a more rational environment, adj. net revenue ("ANR") growth should reaccelerate, 3) Share leadership & network effects are longterm advantages, and profitability in less competitive markets suggests business model can be attractive, 4) Autonomous vehicles will reduce driver dependencies and increase longterm margins, and 5) Consolidation in food delivery sector will be positive for Eats.”
Macquarie: Outperform; $51 12-month price target
“We believe the Mobility Economy (ridehailing, online food ordering, truckhailing, bike/scooters) is still in its early stages of growth with the near-term serviceable addressable markets for Uber Rides & New Mobility of $3T, Uber Eats of $795B, and Uber Freight of $1.3T. We think it is undeniable that these markets will exist in 5+ years’ time and likely be larger than they are today. We see Uber as the market leading way to play this growth and view Uber Freight, New Mobility, and stakes in Yandex Taxi (~38%), Grab (~23%), and Didi (~15%) as investment optionality in a public vehicle.”
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Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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