Uber Outperforms Analyst Expectations - They Are Bullish On Its Strategic Gains and Market Position

Needham analyst Bernie McTernan maintained Uber Technologies Inc UBER with a Buy and raised the price target from $71 to $90.

The re-rating reflected Uber’s better-than-expected fourth-quarter results and first-quarter guidance, pushing his adjusted EBITDA estimates for fiscal 2024 by +4% to $6.0 billion and fiscal 2026 by +2% to $10.4 billion. He expects an adjusted EBITDA of $8.03 billion in fiscal 2025.

While his estimates move higher for fiscal 2024, they are still below the mid to high $6 billion range bulls were at heading into earnings, which now likely requires an acceleration of incremental margins from first-quarter levels or bookings acceleration in fiscal 2024 to reach.

Elsewhere, the analyst is incrementally more bullish on UBER One, with the company leveraging technology to improve cross-platform utilization and should be rolling out new mobility-focused features soon.

KeyBanc analyst Justin Patterson had an Overweight rating with a price target of $79. The analyst noted that Uber’s fourth-quarter results showcased the company’s multiple levers for growth, which continues to flow toward an upside for EBITDA. 

While bears may nitpick more modest beats than in the past, underlying marketplace trends remain healthy, and next week’s Investor Update should reinforce mid-teens gross bookings (GB) growth, faster EBITDA and FCF growth, and a capital allocation program, as per the analyst.

Patterson projected an adjusted EBITDA of $6.2 billion in fiscal 2024 and $8.3 billion in fiscal 2025.

RBC Capital analyst Brad Erickson maintained an Outperform and raised the price target from $65 to $85.

UBER’s fourth quarter highlighted a business that looks to be operating on all cylinders with solid growth, ramping profitability, and significant FCF generation.

The analyst noted that it is now set up for new long-term targets and an inaugural capital return outlook at next week’s investor day. Scale-fueled structural advantages continue to instruct his bullish views here, where he said the space remains underpenetrated overall, the company is driving vital frequency improvements, new delivery vertical growth is continuing to ramp, and advertising has significant headroom to be an outsized margin expansion contributor from here. 

Erickson projected an adjusted EBITDA of $6.07 billion in fiscal 2024 and $8.3 billion in fiscal 2025.

Roth MKM analyst Rohit Kulkarni maintained a Buy and raised the price target from $72 to $79. Uber reported another beat-and-raise quarter with upside to Bookings,

EBITDA and underlying metrics, he stated. Shares barely moved as investors await more love from Uber on its Valentine’s Day update. As per the analyst, Uber remains a “must-own” large-cap company.

He expects next week’s investor update event (February 14) could turn into an incremental sentiment catalyst. Kulkarni projected an adjusted EBITDA of $6.2 billion in fiscal 2024 and $8.08 billion in fiscal 2025.

BMO analyst Brian J. Pitz, Oppenheimer’s Jason Helfstein, JP Morgan’s Doug Anmuth and Bofa Securities’ Michael McGovern also boosted price targets and estimates citing similar base cases.

Price Action: UBER shares traded higher by 1.05% at $71.40 on the last check Thursday.

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