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Uber shares target cut to $83 from $88, Loop Capital maintains buy

Published 2024-05-16, 08:06 a/m
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On Thursday, Loop Capital adjusted its outlook on Uber Technologies Inc . (NYSE:UBER), reducing the price target from the previous $88.00 to $83.00, while retaining a Buy rating for the stock. The decision follows Uber's recent financial results, which were reported last Wednesday and showed a slight shortfall in gross bookings, particularly within the Mobility segment.

The firm revised its growth projections for Uber's gross bookings, now expecting an increase of 22% for the current year and 18% by 2025. These figures are a decrease from the previous estimates of 24% and 20%, respectively. The revised forecast is mainly due to the performance in the Mobility business, which has seen a moderated growth outlook.

Despite the adjustment in gross bookings expectations, Loop Capital's views on the Delivery segment and corporate spending for Uber remain largely unchanged, with only a slight 1% increase in the forecast for 2025 compared to previous predictions. This stable outlook for other aspects of Uber's business suggests that the lowered price target is mainly a reflection of the updated Mobility segment forecast.

The change in the gross bookings forecast has had a direct impact on Loop Capital's adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) expectations for Uber. The firm continues to apply a 20x multiplier to the adjusted EBITDA in their valuation model, which, with the revised figures, has resulted in the new price target of $83.00.

Despite the lowered price target, Loop Capital maintains its Buy rating on Uber shares, signaling continued confidence in the company's overall performance and future prospects. The firm's analysis suggests that while there are adjustments in certain growth metrics, the long-term outlook remains positive for the ride-sharing and delivery giant.

InvestingPro Insights

Uber Technologies Inc. (NYSE:UBER) has been a topic of discussion following its recent financial results, and the revised price target by Loop Capital. To provide additional context, let's delve into some real-time data and insights available from InvestingPro. Uber's market capitalization stands at a robust $139.2 billion, reflecting its significant presence in the market. While the company's P/E ratio is high at 97.64, it's noteworthy to mention that the adjusted P/E ratio for the last twelve months as of Q1 2024 is even higher at 241.1. This indicates a premium valuation, which could be justified by the company's expected growth, as the PEG ratio for the same period is 0.73, suggesting potential for future earnings growth relative to its P/E ratio.

InvestingPro Tips highlight that Uber is predicted to be profitable this year, with net income expected to grow. This aligns with the company's performance over the last twelve months, where it has already been profitable. Moreover, Uber operates with a moderate level of debt, which is a positive sign for investors concerned about financial stability. The company's prominence as a key player in the Ground Transportation industry also adds to its investment appeal.

For those interested in a deeper analysis, InvestingPro offers additional insights. There are currently 11 more InvestingPro Tips available for Uber, providing a comprehensive view of the company's financial health and market position. Readers looking to access these tips can do so by visiting the dedicated page on InvestingPro for Uber. To sweeten the deal, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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