Proactive Investors - Uber Technologies Inc (NYSE:UBER, ETR:UT8) shares reached an all-time high on Friday following Tesla's much-anticipated robotaxi event held last night.
According to Jefferies analysts, the ridesharing platform is poised for growth despite competition from Tesla Inc (NASDAQ:TSLA)'s robotaxi initiatives.
The absence of verifiable advancements in Tesla's autonomous technology reduces concerns about immediate threats to Uber's market position, analysts believe.
In their report, Jefferies described Tesla's unveiling of its robotaxi prototypes, including the Cybercab and the Robovan, as a "best-case outcome for Uber."
Analysts believe that Tesla did not provide "verifiable evidence of progress toward L3 autonomous technology," which casts doubt on the feasibility of its ambitious plans.
Jefferies highlighted that the lack of concrete evidence regarding Tesla's progress minimizes the potential overhang on Uber's stock from the competition in the robotaxi space. "We believe TSLA potentially underappreciates the obstacles to scaling a robotaxi fleet," analysts wrote, citing challenges related to technology, asset ownership, and regulation.
This perspective suggests that Uber may be better positioned to capitalize on the growing autonomous vehicle (AV) market.
Uber's strong positioning is further underscored by the assertion that AV developers are likely to seek partnerships with rideshare companies like Uber, rather than pursue standalone fleets. "We believe robotaxis could significantly expand UBER's mobility total addressable market (TAM)," analysts wrote, as the introduction of lower-priced autonomous offerings could drive increased usage of rideshare services.
Jefferies pointed out four key reasons for their bullish outlook on Uber: multiple growth drivers are expected to sustain impressive booking momentum; the expansion of the total addressable market (TAM) through autonomous vehicles (AVs) could lead to substantial growth; Uber's focus on cost discipline and improving unit economics is driving peer-leading EBITDA growth; and the company's diverse business model offers various offsets to potential macroeconomic slowdowns.
With Tesla's robotaxi aspirations not posing an immediate threat, analysts believe that Uber can now refocus on its robust fundamental trajectory.
Jefferies has reiterated its Buy rating for Uber, setting a price target of $100, indicating a potential upside of 28% from its current trading levels.
Shares of Uber were up 9.6% on Friday afternoon at around $85.40.