On Thursday, a Wall Street firm adjusted its outlook on Uber Inc. (NYSE:UBER), with a slight decrease in the price target. The new target for the ride-hailing giant's shares has been set to $88.00, down from the previous $90.00, while the firm continues to recommend a Buy rating for the stock.
The revision came after Uber's first quarter 2024 gross bookings (GB) fell short of expectations. The company's Mobility GBs, in particular, were lower than anticipated. Despite this, Uber's revenue for the quarter managed to exceed estimates by approximately 2% due to improved take rates in the Mobility segment. Additionally, Uber's earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first quarter were about 4% higher than the firm's estimates.
Looking forward, the second quarter 2024 gross bookings guidance, when excluding foreign exchange impacts, aligns with the midpoint of the firm's estimates. The EBITDA outlook for the same period also matches the consensus view. Following these results, the firm has made modest reductions in its estimates for Uber.
The new price target of $88 is derived from a discounted cash flow (DCF) analysis, as the firm maintains a positive Buy stance on Uber shares. The updated valuation reflects a nuanced view of the company's near-term financial performance and market position.
InvestingPro Insights
Uber Technologies Inc . (NYSE:UBER) continues to be a topic of interest for investors, and real-time data from InvestingPro provides a deeper look into the company's financial health and market performance. With a current market capitalization of $140.7 billion and a notable revenue growth of 14.01% over the last twelve months as of Q1 2024, Uber demonstrates its substantial scale and continued expansion in the ground transportation sector. Its gross profit margin stands at a healthy 32.36%, indicating the company's ability to maintain profitability amidst its growth trajectory.
InvestingPro Tips point out that Uber is expected to see net income growth this year, which is a positive indicator for potential investors. Additionally, the company has been trading at a low P/E ratio relative to near-term earnings growth, suggesting that the stock may be undervalued given its growth prospects. With analysts predicting profitability for the current year and a significant price uptick of 32.67% over the last six months, Uber's stock could be an attractive option for those looking to invest in a leading player in the mobility space.
For those interested in gaining more insights, InvestingPro offers additional tips on Uber, which can be accessed through the dedicated page at https://www.investing.com/pro/UBER. To enhance your investment research, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With 12 more InvestingPro Tips available, investors can make more informed decisions based on comprehensive analysis.
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