UBS analysts initiated coverage of Uber Technologies Inc UBER with a bullish stance as the ride-hailing company is backed by a committed management team that can achieve certain financial milestones.
The Uber Analyst
Eric Sheridan initiated coverage of Uber's stock with a Buy rating and $56 price target.
The Thesis
Uber remains among the most debated stocks and the research firm answers three key questions that support a bullish stance.
The first question asks if Uber can grow its ridesharing gross bookings and revenue at a mid-teens compounded annual growth rate through 2024. Given Uber's status as a market leader in North America and a number one or number two status in markets outside, the company should be able to grow Ridesharing bookings at a 15% CAGR and revenue at 17% CAGR.
The second question asks if UberEats can grow gross bookings and revenue at a 30% CAGR through 2024. Sheridan said the company can continue benefiting from the fast-growing food delivery trend and take advantage of a fragmented supply in the delivery business. The company should be able to grow its food delivery's gross bookings at a 33% CAGR rate through 2024.
The third question asks if Uber can show an EBITDA profit in 2021 and expand margins. The analyst said management's "rationalization of markets" and cutting back on incentives and discounts and eliminated some operating expense lines that can translate to an EBITDA of $43 million in 2021 and a 14% EBITDA margin rate in 2024.
UBER Price Action
Shares of Uber were trading higher by 1% at $36.65.
Related Links
Uber CEO Talks Kalanick, Zomato And Growth
Is 2020 The Year Of Uber? 2 Pros Discuss Key Issues
Photo by freestocks.org from Pexels
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
|---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
