Proactive Investors - Uber Technologies Inc (NYSE:UBER) has earned a repeat ‘Outperform’ rating and a price target raise to US$40 from $US38 from Wedbush analysts after the ride share giant reported strong fourth quarter 2022 earnings on Wednesday.
Uber’s shares were flat in pre-market trading on Thursday at about US$36.82.
In a note to clients, the analysts wrote that Uber had delivered “Zach Ertz-like results,” referring to American football tight end for the Arizona Cardinals Zach Ertz, with its adjusted earnings before interest, taxes, depreciation, and amortization the “star of the show.”
“The all-important adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the quarter came in at $665 million or 7.7% margin compared to the Street’s expectation of $624 million or 7.3% margin, featuring strong beats in the Mobility and Delivery segments, pointing to Uber’s capability of balancing its aggressive growth strategy while booting profitability,” they wrote.
They also noted that Uber reported gross bookings of $30.75 billion, slightly above the Street’s expectation of $30.71 billion, and its total revenue of $8.61 billion beat the Street’s estimate of $8.51 billion.
“We believe this is an inflection quarter/guidance for the Uber story as management sounds very confident in hitting the next gear of growth for 2023 while continuing to grow margins,” the analysts wrote.
‘Strong guidance’ noted by analysts
Wedbush analysts also highlighted Uber’s guidance for the 2023 financial year, with its adjusted EBITDA guidance of between $666 million and $700 million well above the Street’s estimate of $612.1 million.
The analysts added that Uber’s Gross Bookings are forecast to be between $31 billion and $32 billion in line with the Street’s estimate of $31.25 billion.
They noted this pointed “to the strength of Uber’s business model post-pandemic.”
“Uber is confident in sustaining its Gross Bookings growth while as the company continues to benefit from post-pandemic trends continuing to hold globally as major cities activity is at pre-pandemic trends with Uber poised to benefit in 2023.”
The analysts concluded: “In a nutshell, this was a major step in the right direction for Uber with a profitable growth story into 2023 and beyond.”