57.60 +0.08 (0.14%)
After hours: 5:55PM EDT
Inside Bar (Bearish)
|Bid||57.35 x 1000|
|Ask||57.40 x 800|
|Day's Range||56.70 - 59.47|
|52 Week Range||29.35 - 80.25|
|Beta (5Y Monthly)||1.23|
|PE Ratio (TTM)||1,337.67|
|Earnings Date||Jul 28, 2020 - Aug 03, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||47.72|
First came coronavirus, then came the civil unrest. Small businesses with already squeezed margins will not emerge unscathed, according to Fivestars CEO Victor Ho.
Uber Technologies is a global company that is transforming the ride-sharing and meal delivery markets. After a much-hyped debut on May 10, 2019, Uber stock is one of the most watched IPO stocks today, but is Uber a buy right now in the current coronavirus stock market rally? In 2018, Uber had earnings of 59 cents per share, but the profit was temporary.
(Bloomberg) -- Uber Technologies Inc.’s global rides business is down 70% from last year, a slight improvement from its low point in the coronavirus pandemic but an indication that recovery will come slowly.The decline in rides continues to be at least partially offset by a food delivery boom. The Uber Eats business is more than doubling, and the gains are accelerating, Dara Khosrowshahi, the chief executive officer, said Wednesday at a virtual technology conference hosted by Bank of America. Uber intends to drive consolidation in the food delivery market and continues to look for opportunities, he said. He declined to comment on Uber’s proposal to buy Grubhub Inc., which was first reported by Bloomberg last month.Read more: Uber’s Ex-CTO Reflects on a Rift With Travis Kalanick and How to Fix Autonomous CarsLike the rest of the travel industry, Uber has been hard hit by the pandemic and restrictions limiting normal activities. Uber reported a first-ever decline in the gross bookings of rides last quarter and said business was down 80% in April. As a result, the San Francisco-based company has postponed profit targets, eliminated several divisions and sliced about a quarter of its global workforce.Khosrowshahi’s comments Wednesday erased some of the stock’s gains in intraday trading, but shares were up about 3% alongside a market-wide increase.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
As food delivery service Grubhub (NYSE: GRUB) moves closer to a deal that would sell itself to Uber (NYSE: UBER), sources indicate that the closing might still be threatened by a new demand from Grubhub. While the two companies apparently came close to agreement on the sale price, expressed in terms of Uber stocks per Grubhub stock, talks may have reached an impasse over the latest development. Uber would pay this fee to the food delivery service if regulators block the acquisition.
Grubhub shows improving price performance, earning an upgrade to its IBD Relative Strength Rating from 78 to 82.
Speculation about an Uber-Grubhub tieup continues apace. The reaction among investors has been bullish. Will it stay that way for Uber stock?
After a bumpy couple of days, the S&P 500 traded somewhat quietly on Friday, after bouncing off the 3,000 area and 200-day moving average. With that in mind, let's look at a few top stock trades for next week. Top Stock Trades for Monday No. 1: Zscaler (ZS) Click to EnlargeSource: Chart courtesy of StockCharts.com Zscaler (NASDAQ:ZS) shares are ripping higher after better-than-expected earnings.Coming into the event, shares were trading higher, grinding up in a modest channel (blue lines) and maintaining about the 20-day moving average. However, shares were struggling to clear the $77.50 level.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat is, until earnings. The stock opened up near prior 2019 resistance around $85, before surging up to $98 as shares ended the day Friday up 29%. From here, I wouldn't be surprised to see $100 hit, with the 123.6% extension up near $101.On the downside, however, I want to see prior resistance hold as support at $85 -- along with the prior high near $90. Top Stock Trades for Monday No. 2: Canopy Growth (CGC) Click to EnlargeSource: Chart courtesy of StockCharts.com Canopy Growth (NYSE:CGC) stock is getting crushed on Friday, down just about 20% after disappointing quarterly results.The move comes after last week's breakout and this week's continuation above the 200-day moving average and $20 mark. So, what now?As you can see on the chart above, CGC stock tried to rally back over the $18.25-ish area, which was the April high and a significant level dating back to October 2019. However, shares were rejected on this move.Bulls need to see this level reclaimed. If it can, it puts a gap-fill back up toward $20 in play, as well as the 200-day moving average. On the downside, I want to see the 50-day moving average and the backside of prior downtrend resistance (blue line) hold as support. Below puts $14 on the table. Top Stock Trades for Monday No. 3: Occidental Petroleum (OXY) Click to EnlargeSource: Chart courtesy of StockCharts.com Occidental Petroleum (NYSE:OXY) isn't looking too hot, down 5% on Friday. Shares were unable to push higher, most recently failing at $15 before rolling over.However, the lack of bullishness has been a multi-month process. Shares failed to reclaim the 23.6% retracement, before forming a series of lower highs. Now, it's losing the 50-day moving average, as well as uptrend support.From here, bulls need to see the $12.75 area hold as support. Below $12.50 and a retest of $10 isn't out of the question.Given how poorly the stock has done amid the big rebound in the S&P 500 and crude oil, traders may be better off looking elsewhere than OXY. I mean sheesh, crude just had its best month ever and Occidental is down about 20% for May.Shares do not look attractive amid the current setup. Top Stock Trades for Monday No. 4: Uber (UBER) Click to EnlargeSource: Chart courtesy of StockCharts.com Shares of Uber (NYSE:UBER) have made an impressive climb from the March lows. The stock hit $14 in March and continues knocking on the 78.6% retracement just below $36.The firm is in talks with GrubHub (NYSE:GRUB) to hammer out an all-stock deal. If the stock reacts bearishly to the news, we have to consider a pullback. In this case, look to the $31 area, where Uber will find its 200-day moving average and uptrend support (blue line).On a breakout over the 78.6% retracement, look for a possible gap-fill up toward $40.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * The Huge Story for 2020 & Beyond That You Aren't Hearing About * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * The 1 Stock All Retirees Must Own The post 4 Top Stock Trades for Monday: ZS, CGC, OXY, UBER appeared first on InvestorPlace.
GrubHub Inc. shares [S: GRUB] are up 8% in Friday trading after a Bloomberg News report indicated that the company has narrowed the price gap in its deal talks with Uber Technologies Inc. and that the two companies are now "haggling" over a breakup fee. GrubHub wants to receive a cash sum if the deal is blocked for regulatory reasons, while Uber "is reluctant to concede to any sizable payment," according to the report, which cites multiple unnamed sources. A Rhode Island congressman called a possible merger between Uber and GrubHub "a new low in pandemic profiteering" after the deal talks were reported earlier in March. The proposed deal price would value GrubHub at a premium over Thursday's closing price of $52.83, the Bloomberg report said. Representatives from Uber and GrubHub didn't immediately respond to MarketWatch's request for comment. GrubHub shares have added 20% over the past month, as Uber's stock has gained 13%. The S&P 500 is up 3.4% in that span.
Grubhub shares rose, as merger talks now focus on the idea that Uber , which would be buying the food-delivery specialist, would pay a breakup fee if the government blocks their tieup. The New York company wants San Francisco ride-hailing giant Uber to commit to a cash payment in the event regulators reject the deal, knowledgeable sources told Bloomberg. The potential deal has drawn the attention of government regulators, who are concerned about the hefty fees the companies charge restaurants and the lowly status of their workers, Bloomberg reports.
(Bloomberg Opinion) -- Alarmed at high fees, restaurant owners are demanding that delivery services such as Grubhub Inc. cut them a break during the pandemic. Unfortunately, politicians are listening.New York City imposed price controls on the apps this week, prohibiting them from charging delivery fees of more than 15%. San Francisco, Seattle and Washington have made similar interventions. Many other cities will be tempted to follow suit. They shouldn’t.Higher prices for delivery reflect rising demand in a period when most of the country is stuck at home. If restaurants find these fees too burdensome, they can hire their own delivery workers or switch to another app — and in New York City, there are at least a dozen, so there’s no lack of competition. It’s true that Grubhub and Uber Eats, two of the biggest delivery apps, are contemplating a merger. But it’s hard to argue that either has engaged in predatory pricing when neither makes any money. Uber Eats, in fact, is losing about $300 million a quarter.Which suggests a bigger problem with price caps. Although delivery apps have proved quite popular, no one has devised a decent business model for them. At the moment, they’re kept afloat thanks to lavish subsidies from investors. That means consumers get deliveries for much less than they’d otherwise have to pay, and restaurants, far from being scammed, are in fact paying significantly below what the market would demand absent such support.This may or may not be a good bet by investors, but in the meantime the arrangement creates substantial benefits. Restaurants can connect with a much larger customer base, offload the hassles of delivery and market themselves efficiently without having to add staff. Apps can compete for market share with attractive prices. And customers can choose from an astonishing variety of cuisines while having their orders dropped off for a relative pittance.Price controls won’t improve this model. To the contrary, they’ll induce apps to pass along the added costs to customers, thereby reducing demand for the very restaurants they’re intended to help, or to narrow their coverage areas to only the most profitable addresses. More customers will order food for pickup to avoid the fees, increasing the risk to public health. And investors may tire all the sooner of subsidizing loss-making services whose potential revenue is artificially capped.Rather than attempting to re-engineer the delivery economy, city governments should be laying the groundwork so that restaurants and other small businesses can safely reopen, while Congress should focus on getting direct aid to these companies, in particular by fixing some of the perverse incentives created by previous relief measures.The unfortunate fact is that restaurants are in for an extended period of turmoil. Policy makers should do all they can to help them out — and avoid adding to the damage along the way.Editorials are written by the Bloomberg Opinion editorial board.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Ron Parise has spent about 50 hours a week for the last two years on the roads of Cape Coral, Florida, shuttling tourists and snowbirds between their rentals and the airport for Uber Technologies Inc. and Lyft Inc. All that came to a sudden stop in late March, when the arrivals gates went quiet and Parise’s wife insisted he stay home to avoid exposing himself to the coronavirus.Parise, 73, used his newfound free time to apply for any public assistance program for which he thought he might qualify. Nothing came through until early this month, when he received $11,500. It’s a small-business loan forgivable under certain conditions, part of the $659 billion Paycheck Protection Program, which is designed to encourage companies to keep paying employees during the pandemic. Parise believes he qualifies because he owns a one-man business to support his job driving.The state of Florida initially told Parise he wasn’t eligible for unemployment insurance, but he recently began receiving checks under the federal Pandemic Unemployment Assistance program, which gives relief to independent contractors who have been impacted by the pandemic. This created an ethical dilemma for Parise, and perhaps a legal one, too. The small-business money is supposed to keep bosses like Parise from laying off workers— in this case, just Parise. Unemployment benefits are intended for people who have lost their jobs. “I don’t want to seem like I’m double dipping,” he said. “I’m happy to stay home and collect the government money if I can.” Parise said he hasn’t decided what to do but is leaning toward taking taking both and paying back the loan before it comes due in two years.While Uber considers its drivers to be independent contractors, some like Parise set up small businesses to manage their income from driving. The designation helps minimize personal and tax liabilities and for Parise, validates his status as an entrepreneur in his own right. “I’m more of an independent business person,” he said. “I hire Uber to send me customers.”Deciphering the rules around the government’s financial-assistance programs is a widespread challenge, and ride-hailing drivers face a particularly complicated route. The pandemic has left most of them unable to find enough work to get by. Meanwhile, Uber and Lyft haven’t altered their stance that drivers are independent contractors, not employees, disqualifying them from unemployment insurance in most states. The companies have directed drivers toward at least three alternatives, including the two Parise applied for.Congress created Pandemic Unemployment Assistance to help provide financial relief to workers normally ineligible for unemployment benefits, and Uber successfully lobbied for its drivers to be included. States manage the federally funded program, and implementation has been patchy at best. Many drivers have yet to receive money or even confirmation they’ll get it eventually, said Harry Campbell, who runs a popular website for drivers called the Rideshare Guy. “Some people are getting unemployment,” he said. “Some aren’t.”The financial-aid programs for small businesses have been similarly inconsistent. Tied up in the practical questions of where drivers can turn for help is an unresolved fight over whether Uber and Lyft’s workers should be considered employees of the companies. Many drivers, along with labor groups and Democratic public officials, have said the companies are cheating drivers out of benefits and offloading the costs onto taxpayers. “They are using the moment to crystallize the fact that, in their view, these workers should not have the benefit of employee status,” said Brian Chen, a staff attorney at the National Employment Law Project, a worker advocacy group. Ride-hailing companies oppose efforts by drivers to access traditional unemployment benefits from states, which are financed through payroll taxes. Uber and Lyft are contesting a California law intended to classify workers like their drivers as employees, and the state recently sued them in response. Most drivers, said Chen, would receive more generous benefits from state programs, an assertion Uber contests. “Congress fully funded pandemic unemployment assistance for gig workers so that every state, many of which face historic deficits, could give these workers immediate financial support at no cost to their own state funds,” said Harry Hartfield, a spokesman for Uber.Lyft and Uber would have been on the hook for $413 million in unemployment insurance costs over the last five years in California alone, according to a study published this month by the University of California, Berkeley’s Institute for Research and Labor. A similar analysis by officials in New Jersey said Uber would have faced a bill of $530 million for unemployment and disability from 2014 to 2018. Tally up the 48 other states, and you’re looking at a significant additional cost for two companies that have never been profitable.“I don’t want to seem like I’m double dipping”New York courts have ruled multiple times in favor of Uber drivers seeking unemployment benefits in the last year, but only after a lengthy process that’s onerous for both applicants and the state, said Nicole Salk, a senior staff attorney with Legal Services NYC who has represented several drivers in such cases. “It causes problems for the whole system.” she said.On Monday, four drivers for Uber and Lyft and a worker advocacy group sued Governor Andrew Cuomo and the New York Labor Department in federal court, claiming the state failed to pay unemployment benefits promptly. Jack Sterne, a spokesman for the governor, said New York is ahead of other states in its response to the jobs crisis and is processing more than 100,000 applications a week for the federal unemployment program. “During this pandemic emergency, we have been moving heaven and earth to get every single unemployed New Yorker their benefits as quickly as possible—including Uber and Lyft drivers who are treated no different than any other worker,” Sterne wrote in an emailed statement.Amara Sanogo, a driver in the Bronx, is living off his credit cards and helping his three children with their Zoom video curriculum as he waits for a response from the state about whether he qualifies for benefits. When he applied nearly two months ago, Sanogo set up an online account on a state website and was told he’d get updates there. “Every day I check that account,” he said. “There are no more messages.” New York’s Labor Department is now advising gig economy workers to apply to the federal program instead of the state’s.For drivers who set up a business to manage their Uber income, there are signs of significant interest in the small-business programs. Ron Walter, a driver in the Denver area who primarily works for Uber and Grubhub Inc., wrote a blog post about his experience applying for a PPP loan, which companies don’t need to pay back as long as they keep paying employees and adhere to other guidelines. Walter’s blog post contained a link encouraging other drivers to apply through a website called Womply.com, which charges lenders a commission for sending them leads. Dozens of drivers clicked through the link and filled out applications, according to data Walter received from Womply that was reviewed by Bloomberg.Walter got a loan of $4,800 and anticipates he’ll have to pay it back. He didn’t apply for other government programs, he said, because it didn’t feel right. Since Walter mostly delivers food, he said he’s actually doing pretty well. He can squeeze more deliveries into every hour and gets paid more. “Traffic is a lot better, and parking is a lot better because everybody is staying home,” he said. But as the economy worsens, Walter worries demand is not going to last. At some point, he said, “people run out of money.”(Updates with lawsuit in the 12th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The proposition would rollback the law known as AB5, which was targeted at forcing ride-sharing and food-delivery companies to classify their drivers as employees rather than contractors.
As COVID-19 continues to transform our economic reality, two megatrends are converging to create a once in a lifetime investment opportunity
Uber finished the quarter with an adjusted EBITDA loss of $612 million, which is expected to be worse in the second quarter, given that shutdowns in most areas didn't begin until March. Last year, Uber had set a goal of reaching adjusted EBITDA profitability by the fourth quarter of 2020, but the company pushed that back to 2021 due to the pandemic. Despite the recent setbacks, CEO Dara Khosrowshahi and his team remain squarely focused on the bottom line.
With its core ride-hailing business plummeting amid the pandemic, Uber is eyeing meal delivery and electric scooters for growth once COVID-19 is contained.
The core question facing the food delivery business is simple: Can it ever be profitable? The search for a path to profitability is the obvious driver of the current discussions about a potential acquisition of (GRUB) (GRUB) by (UBER)’ (UBER) food-delivery arm, Uber Eats. Food delivery faces the same competitive dynamic as ride sharing.
THE NUMBER ONE What’s your favorite coronavirus comfort food that you’ve kept ordering for delivery, germophobia be damned? It probably depends on where you live. Yelp (YELP) had one of its data scientists mine the text of dish names being ordered on its app and review site since shelter-in-place orders began on March 16 to determine what Americans have been craving as the pandemic has upended life around the country.
With talks apparently continuing between Grubhub (NYSE: GRUB) and Uber Technologies (NYSE: UBER) over Uber's possible acquisition of the food delivery service, four senators sent a letter to the Department of Justice (DOJ) and the Federal Trade Commission (FTC) asking them to watch the deal carefully. The senators, all Democrats, allege the deal could damage the market's competitiveness and they want a full investigation if Uber actually agrees to buy Grubhub.
My wife placed an order on Grubhub (NYSE: GRUB) from a local Italian restaurant. When it arrived, a piece of it was wrong (we received the spaghetti bolognese entree instead of the polenta bolognese appetizer) and we were charged for the pricier item as well as a mysterious tip on top of the 15% we had already added. This eatery was not an actual Grubhub partner.
It has been a difficult year for restaurant stocks to say the least. Thanks to the novel coronavirus, the sector has been absolutely walloped. Even with the market generally recovering strongly, most of the restaurant names remain down in the dumps. Dunkin' Brands (NASDAQ:DNKN) stock, however, is one exception.Source: JStone / Shutterstock.com Shares fell from $75 to $38 during the crash, but are back up to $65 now. And with good reason: Dunkin' should get back to its old highs as investors realize it is one of the best-positioned restaurants in this new economic environment. Why would that be? First, let me tell you a story.Because my youngest son was born in New York and spent the first eight years of his life there, he "grew up" with Dunkin' Donuts. Soon, he became one of the restaurant chain's biggest fans. Almost every weekend, we'd drive to the local Dunkin' shop to pick up a dozen doughnuts, along with a box of doughnut holes.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut then we moved to California and left the East Coast Dunkin' behind. My son never really got over it. Every time I traveled to the East Coast for business, he'd ask me to bring back a doughnut or two, if I could. And if I couldn't, he'd ask me to at least take a photo of a Dunkin' Donuts shop and send it to him. * 7 Dow Jones Stocks to Buy With Fortress-Like Balance Sheets That's a powerful example of "brand value," and that's one of the traits that will enable Dunkin' Brands to thrive in the post-Covid-19 world. And that tradition will continue well into the next generation and beyond. Plenty of Room for Brand GrowthWhile many East Coasters, like my son, are huge fans of Dunkin' Donuts, much of the country isn't so familiar with Dunkin' yet. The company launched its initial public offering in 2011 in part to raise funds and enhance its public stature as part of a big expansion push across the United States. That is well under way now, as the company has found new franchisees outside of its core East Coast market.There's also a large overseas opportunity for Dunkin' Donuts. International revenues account for just 17% of the company's total sales at this point. However, this could grow a ton. As of year-end 2019, Dunkin' Donuts had more than 13,000 locations. Nearly 10,000 of those are in the United States, and the other 3,500 are international. Three thousand five hundred is an impressive number and shows the potential for the company to become a coffee and fast-food leader around the world, following in the footsteps of McDonald's (NYSE:MCD) and Starbucks (NASDAQ:SBUX). Dunkin' Is a Natural Social-Distancing WinnerThe Canton, Massachusetts-based company's other main winning trait is a business model that relies heavily on "takeaway" purchases and mobile deliveries.Takeout orders represented 90% of the company's business even before the quarantines started. Unlike Starbucks, few people go to Dunkin' to hang out and enjoy the ambiance. Dunkin' has never marketed itself as a public space to linger with friends or get work done. So it loses little from switching to all takeout and delivery for the time being.On top of that, Dunkin' is actively finding new clients through delivery services. The company has added delivery alliances with GrubHub (NYSE:GRUB), UberEats (NYSE:UBER), DoorDash and Postmates. Put it all together, and the company has doubled its pre-coronavirus delivery capacity. The Verdict on DNKN StockDunkin' has a fantastic brand. And, unlike a McDonald's or Starbucks, it's not fully saturated yet. There are plenty of markets, both in the United States and overseas, for Dunkin' to tap in to.On top of that, Dunkin' has a unique advantage right now: Its brand is based around its products, but not its in-store experience. People like Dunkin's doughnuts and drinks (and the ice cream at Baskin-Robbins), not the look of its restaurants. Thus, Dunkin' can seamlessly switch to delivery and takeout only for some time, while many competitors lose much of their appeal without dine-in eating.So, I expect Dunkin' Brands to snap back quickly and thrive in the post-coronavirus world. Dunkin' was set to earn more than $3 per share before the virus hit. And the company has historically grown earnings at more than 10% a year thanks to its new-store growth and large share buyback.For a fast-growing franchisee restaurant chain, the market normally would pay at least 25x earnings, which would support a stock price up toward $80. As investors figure out that sales should be steady, and perhaps even increase as the new delivery options kick in, expect shares to continue moving higher.Eric Fry is an award-winning stock picker with numerous "10-bagger" calls -- in good markets AND bad. How? By finding potent global megatrends … before they take off. And when it comes to bear markets, you'll want to have his "blueprint" in hand before stocks go south. Eric does not own the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * America's Richest ZIP Code Holds Shocking Secret * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post Dunkin' Brands Has the Perfect Recipe to Overcome Coronavirus Challenges appeared first on InvestorPlace.
Uber (NYSE:UBER) stock rose approximately 11% ahead of its earnings report on May 7. The rally had less to do with the ridesharing company and more to do with competitor LYFT (NASDAQ:LYFT) The company reported first-quarter revenue growth and unveiled its plans to survive the pandemic.Source: vaalaa / Shutterstock.com In reporting its own set of earnings, Uber revealed it lost $2.9 billion in the first quarter, translating to a GAAP loss of $1.70 per share for the period. Analysts were expecting a loss of $1.53 billion in the first quarter or 90 cents per share.On the bright side, CEO Dara Khosrowshahi noted the core ride-hailing business was showing signs of recovery with week-over-week gains in each of the last four weeks. Revenues climbed to $3.54 billion, a 14% increase over the year-ago period, but rides were down 3%.InvestorPlace - Stock Market News, Stock Advice & Trading TipsDespite the disappointing results, Khosrowshahi said he was confident that the company has ample liquidity to survive the effects of the novel coronavirus pandemic. Uber Eats is the company's strong suit in these times; it grew 54% YoY, thanks to the surge in demand for food deliveries. Also, the company is looking to curtail its fixed costs and investments to narrow out its losses as much as possible. * 7 Excellent Penny Stocks Ready to Roar I was quite satisfied that these are all positive developments. Uber has done what it can to make the best of a bad situation. It has been nimble-footed in carrying out some essential spring cleaning, and as the effects of the virus start to dissipate, the markets will reward these efforts. Uber Eats is Growing at a Fantastic PaceAt its 2009 start, Uber's primary purpose was to help people to get from point A to B, essentially creating a new platform for ridesharing. Since then; it has become a multi-billion dollar company, diversifying into several different service areas apart from its core business. One such segment is the food delivery service Uber Eats. It started as a pilot project in 2014 called UberFresh, delivering lunch and dinner from specific restaurants in California. Since then, it has expanded its restaurant selection and operates in several markets around the world. The Uber Eats division has had double-digit revenue growth for the past five years, with a 54% growth in Uber's latest quarter results.However, the segment has had trouble gaining traction in certain regions, particularly India and China. Rather than waste time, energy and money, the company has discontinued its operations in China and sold the Indian Uber Eats operations to Zomato earlier this year.Interestingly, though, Uber announced it is making a play to acquire Grubhub (NYSE:GRUB), which currently has a 30% market share in the food delivery business. With the acquisition, Uber Eats would have 50% of the market share in the food delivery business, 15% bigger than its main competitor, Doordash. Liquidity and Cost CuttingUber and other ride-hailing services have been hit hard by the health crisis, which is why they are looking to preserve the strength of their balance sheets. Currently, Uber's cash equivalents and short-term investments are $9.0 billion, which the company feels is enough to cover its cash burn until there is a significant rebound in demand for its ride-hailing service.Belt-tightening initiatives are already underway, as the company laid off 14% of its workforce in the past couple of months. Uber is also closing around 40% of its Greenlight locations. CEO Khosrowshahi has also agreed to waive his base salary for the rest of 2020. In addition to this, the company has exited eight global markets and has pulled back $150 million in advertising and incentives.It's worth noting that Uber recently landed a contract worth $810 million to provide ride-hailing services to the U.S. federal government, which will run through 2025. All of these initiatives should help shore up the company's balance sheet, leading me to believe the company has sufficient liquidity to weather the storm. About That ValuationMost analysts believe that Uber is currently underpriced and that investors could grab the stock at a bargain. According to Refinitiv, the price target for Uber stock lies somewhere between $55 and $15, with the average at $39.40. Surprisingly, Refinitiv has boosted its Earnings Rating for Uber over the past week from 5 to 7. The average Earnings Rating for its Online Services industry is 6.4, while the S&P 500 index average is 6.5. Additionally, Uber stock trading at a 37% bargain to its 52-week high price at $47.08. Therefore, there is a 21% upside to the stock to its current price of $32.54 per share.Uber's Q1 results are underwhelming. Analysts expect a more challenging second quarter due to negative headwinds and the structure of the company's offerings. However, the company's swift actions in preserving its liquidity and focusing additional resources on its Uber Eats division are likely to pay dividends in the future. Bottomline on Uber StockUber's core ride-hailing business is showing signs of recovery, and with the easing of restrictions across the world, things will only get better. The balance sheet looks strong enough to survive the crisis until the end of the year, but it needs to cut costs wherever it can to give it more breathing space. Furthermore, the acquisition of Grubhub will give it a decisive edge over its competitors in the food delivery business.Considering all this, it should come as no surprise that I am long on Uber stock.As of this writing, Muslim Farooque did not hold a position in any of the securities mentioned above. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * America's Richest ZIP Code Holds Shocking Secret * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post Go Long on Uber Stock Despite Short-Term Headwinds appeared first on InvestorPlace.
Big tech companies will acquire smaller tech companies despite coronavirus pandemic. Yahoo Finance's On The Move panel discusses.