Uber Not Seeing Consumer Slowdown, Analyst More Convinced Of Profitability Target After Q3 Earnings

Rideshare and mobility company Uber Technologies Inc UBER reported revenue growth of 72% in the third quarter. Here’s what analysts said after earnings.

The Uber Analysts: RBC Capital analyst Brad Erickson had an Outperform rating and a price target of $46.

JMP Securities analyst Andrew Boone had a Market Outperform rating and a price target of $65.

Mizuho Securities analyst James Lee reiterated a Buy rating and a price target of $46.

Morgan Stanley analyst Brian Nowak had an Overweight rating and a price target of $54.

Needham analyst Bernie McTernan had a Buy rating and raised the price target from $52 to $54.

The Analyst Takeaways: Uber reported revenue growth and beat EBITDA estimates from analysts. RBC Capital's Erickson said the company missed on bookings, trips and several other metrics.

“Mobility demand is as high as ever and rising, driver incentives are low and falling, the competition’s rationalizing promotions and advertising is ramping — all encouraging and point to meeting/exceeding ’24 targets,” Erickson said.

JMP Securities' Boone called the path to a goal of $5 billion in 2024 EBITDA more clear after the earnings report with no impact seen from macro issues.

“Uber reported strong 3Q22 profitability despite unfavorable FX as macro has yet to impact mobility or delivery demand and October is tracking as the best month ever for mobility and total company-side gross bookings,” Boone said.

The analyst was “increasingly confident” in Uber hitting its $5 billion EBTIDA goal.

Mizuho Securities' Lee said Uber had a “resilient business model with optimized efficiency."

“With macro uncertainties, Uber leveraged its scale with cross-selling, lower customer acquisition costs from rational competition and higher network density to drive margin expansion,” Lee said.

Uber was the analyst’s top pick in the travel sector.

Nowak said the four key learnings from Uber’s financial results were driver supply, share gains, gross margins and advertising.

“The resiliency of Uber’s delivery business through a weakening consumer is a positive surprise,” Nowak said.

The analyst said visibility into fiscal year 2023 was low and would need to be monitored.

Morgan Stanley's Nowak said Uber was gaining market share from peer companies and could also have a differentiator with less worry about driver shortages.

Needham's McTernan raised the price target on Uber shares and is “increasingly confident” in the company’s profitability targets going forward.

“Uber continues to drive internal efficiencies to win on driver supply and grow delivery margins,” McTernan said. “Technology product enhancements are showing through in both Mobility and Delivery to drive share gains and margin expansion.

The analyst said Uber was not seeing a consumer slowdown.

UBER Price Action: Uber shares were down 1.82% to $29.21 on Wednesday at publication.

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Photo: Courtesy Uber