Uber Technologies Inc UBER delivered strong fourth-quarter results on Wednesday, topping expectations for both rideshare and delivery bookings, as well as EBITDA.
Analysts from Morgan Stanley, Needham and others remain positive about the company, praising its improvement in market share, loyalty and profitability, as well as its growth in unit economics. Here’s what the Street has to say about Uber's quarterly print.
Uber's Quarter By The Numbers: Uber reported earnings of 29 cents a share on revenue of $8.6 billion.
Analysts expected Uber to report a loss of 15 cents on revenue of $8.5 billion. Uber revenue soared 49% year-over-year. Gross bookings grew 19% to $30.7 billion, or 26% on a constant currency basis.
Morgan Stanley On Uber: Analyst Brian Nowak reiterated an Overweight on Uber and left a $54 price target unchanged.
Morgan Stanley believes Uber’s ride market share in the U.S. is at six-year highs, driven by broad based gains, the analyst said. He expects Uber to gain more market share in Europe as the company focuses on delivery and local players rationalize spending.
“Profits are improving too in (as an example) the UK where after being 'deeply unprofitable' in 2021, Uber turned profitable in late 2022,” Nowak said. “We expect these dynamics to continue in the region, as European players further rationalize their footprint.”
Read also: Lean And Mean? Looking At Uber Just Months After CEO's Memo
Needham On Uber: Bernie McTernan reiterated a Buy rating on Uber with a $54 price target.
Uber is a “cheap stock” on increasingly achievable 2024 targets, the analyst said, adding that Needham expects Uber to roughly hit the $5-billion adjusted EBITDA target in its 2024 estimates that it provided at its investor day last year.
“Importantly, following '22E results this target appears increasingly achievable,” McTernan said. “Despite being 10% below guidance on bookings, we are above the original guidance on margins.”
Oppenheimer On Uber: The investment bank reiterated an Outperform rating on the stock and raised its price target from $45 to $55 on stable gross bookings and better margin guidance.
“We believe UBER's superior network liquidity and leading logistics technology are well positioned to capture additional market share in ride-sharing and online food delivery, which remain underpenetrated globally,” analyst Jason Helfstein said in a Thursday note.
“Expansion into new markets, improved freight offering, new transportation solutions, and positive traction with subscription products could be potential near-term catalysts, along with autonomous technology improving marketplace unit economics.”
Bernstein On Uber: The investment bank reiterated an Outperform rating on the stock and raised the price target from $40 to $45.
“In a tricky macro environment, Uber continues to have a relatively positive growth and operating leverage story, and remains our top pick in the group,” Nikhil Devnani said in a note to investors.
“Overall, we thought the print was supportive of our thesis on the stock — a market leader that's gaining share at compelling incremental margins. We expect modest upward bias to near-term Street estimates and increased comfort around the multiple being placed on the shares.”
Susquehanna On Uber: Shyam Patil has a Neutral rating and raised the price target from $32 to $40.
“The company continues to impress as it makes strides toward its profitability goals,” Patil said in a Thursday note. “We continue to like the business, positioning, and large opportunities ahead, though we see the risk/reward as balanced at this point.”
Susquehanna’s downside risk target is $25.
RBC Capital Markets On Uber: RBC reiterated an Outperform rating on the stock with a $46 price target.
“UBER's Q4 report was unprecedentedly clean though it was against elevated expectations where UBER is one of the more loved names in the internet starting out the year despite regulatory concerns remaining a significant overhang,” Brad Erickson told investors Thursday.
“Take rate upside is driving increasing EBITDA estimates, the delivery slowdown continues to be somewhat of a myth, ads are ramping ahead of the '24 targets and a focus on GAAP EBIT puts UBER on a path to index inclusion and an expanding shareholder TAM while driver classification reg concerns are likely overdone, in our view.”
UBER Price Action: Shares of Uber were trading down 0.81% at $36.53 late Thursday morning, according to data from Benzinga Pro.
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