On Wednesday, Evercore ISI maintained a positive outlook on Uber Technologies Inc . (NYSE:UBER), reiterating an Outperform rating with a steady price target of $80.00. The firm's stance follows Uber's Q1 earnings, which revealed a mix of results, including a slight miss on bookings but a higher-than-expected EBITDA.
Uber reported Q1 bookings of $37.7 billion, marking a 21% increase, which was consistent with the previous quarter but fell short by 1% of Evercore ISI's and the Street's expectations. Conversely, the company's EBITDA for the quarter reached $1.4 billion, representing a 3.7% margin and surpassing the firm's and the Street's forecasts by 5%.
The company's Mobility bookings were $18.7 billion, down 3% from expectations, while Delivery bookings slightly exceeded predictions at $17.7 billion. Both segments achieved record-high adjusted EBITDA margins of 7.9% and 3.0%, respectively.
Evercore ISI highlighted the strength of Uber's fundamentals, noting solid bookings growth of 21% excluding foreign exchange impacts and record-high adjusted EBITDA margins. The firm also mentioned that they will be hosting Uber's CFO at the upcoming "Nothing But Net" Internet Summit on May 29th in New York.
In terms of future estimates, Evercore ISI adjusted its projections, slightly lowering gross bookings by approximately 1% for FY24 and FY25. However, EBITDA expectations were raised by 2% for FY24 and lowered by 2% for FY25. The $80 price target remains unchanged, based on 21 times the firm's 2025 EBITDA estimate of $7.8 billion, 25 times the 2025 free cash flow estimate of $7.5 billion, and 40 times the 2025 GAAP EPS estimate of $1.84. The firm believes that a projected nearly 40% EBITDA/free cash flow compound annual growth rate supports these multiples.
InvestingPro Insights
InvestingPro data highlights Uber Technologies Inc.'s robust market position and growth trajectory. With a market cap of $135.0 billion and a revenue growth of 16.95% in the last twelve months as of Q4 2023, the company demonstrates significant scalability. Although the P/E ratio stands at a high 69.59, the PEG ratio of 0.65 suggests that Uber's earnings growth could justify this valuation. Additionally, the company's gross profit margin of 32.55% indicates a strong ability to convert sales into profit.
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