Stock Analysis & Ideas

Uber: Strong Online Figures Confirm the Bull Thesis

Back in early-March, Uber (UBER) revised its Q1 guidance to the upside. The company’s outlook originally called for bookings in the $25-26 billion range and $100-130 million of EBITDA, but then Uber boosted the EBITDA range to $130-150 million.

While the bookings outlook stayed the same, the company indicated February was a record month for delivery and that mobility bookings had reached 95% of pre-pandemic 2019 levels.

Uber reports 1Q22 earnings on May 4, and another data point offers further promise, namely some strong online traffic trends.

Specifically, Unique Visitors (UVs) reached 198.59 million in the quarter, a 31% sequential improvement. On a year-over-year basis, the improvement is more pronounced — a 68% increase.

To get a sense of March trends and how they might affect the quarter’s performance, BTIG’s Jake Fuller has been sifting though other data.

In the post-Omicron environment, turns out delivery has performed “surprisingly well” with Uber’s US bookings “trending up sequentially” throughout the quarter. March bookings appeared to be significantly better that February’s, a month in which Uber already claimed annualized bookings were an at all-time high. Although spoiling the picture somewhat is the fact DASH still appears to be leading the way in terms of sequential and year-over-year growth. The US also accounts for less than 50% of the delivery business, and Fuller does concede he lacks “visibility” into trends beyond the US.

Nevertheless, the mobility trends are also highly encouraging. For the quarter Fuller’s data posits US mobility bookings growth at almost 90% of 2019 levels and accelerating to 95% in March. Here, Fuller notes that the reported bookings are global and have “exceeded what we see in our US data.”

So, sounds good for Uber ahead of the Q1 print, but what does it all mean for investors? Fuller sticks to a Buy rating, backed by a $65 price target. Should the figure be met, investors are looking at returns of 109%. (To watch Fuller’s track record, click here)

Overall, there are currently 26 analyst reviews on record, with one of those recommending to Sell but all others say Buy, making the consensus view on UBER a Strong Buy. There’s plenty of upside projected too; going by the $59.50 average target, shares are anticipated to rise 91% in the year ahead. (See Uber stock forecast on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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