The CEO of Uber Technologies, Inc. (UBER), Dara Khosrowshahi, is confident about the company’s ride-hailing business hitting new highs next year, according to a report published by Bloomberg.
In an interview with Bloomberg Television, Khosrowshahi said, “Post-COVID we’re an all-weather company and think we can succeed and grow really in every environment.”
Headquartered in California, the company offers ride-hailing, food order and delivery and freight transportation services.
Shares of Uber rose 4.3% on Tuesday to close at $37.26. Moreover, the stock was trading 0.5% up, at the time of writing, in the early trading session on Wednesday.
The company has updated its outlook for the fourth quarter of 2021 and now expects consolidated gross bookings and adjusted EBITDA to lie towards the higher end of the guidance range provided with the third-quarter results in November.
It expects gross bookings to be around $25 billion to $26 billion and adjusted EBITDA in the range of $25 million to $75 million.
Additionally, Khosrowshahi expects Uber’s delivery business to post incremental profits “at or above” long-term profit-margin targets of 5% driven by a 25% year-over-year rise in its delivery audience.
Khosrowshahi added that rather than building its own fulfillment warehouses, the company will focus on boosting partnerships with grocery stores amid increased competition among rapid-delivery service providers.
Meanwhile, he does not expect Uber to enter into a lot of M&A deals next year.
“We are always looking in the market for opportunities, but right now the hurdle is unusually high,” the CEO added.
Wall Street’s Take
On December 15, J.P. Morgan analyst Doug Anmuth maintained a Buy rating on the stock but lowered the price target to $68 from $72 (82.5% upside potential).
Last month, after the company announced the launch of Uber One, a new unified subscription offering, Morgan Stanley analyst Brian Nowak reiterated a Buy rating on Uber with a price target of $72 (93.2% upside potential).
The analyst said, “UBER’s new offering provides a greater selection of benefits at lower costs than competitor offerings, while better emphasizing UBER’s multi-product advantage more than its previously segmented offering. We think a more cohesive subscription offering will be important as UBER looks to drive incremental gross bookings post recovery and compete more effectively against Lyft (LYFT) and DoorDash (DASH) (DashPass at 9 million subscribers in largely the U.S. alone versus UBER at 6 million subscribers globally).”
Overall, the stock has a Strong Buy consensus rating based on 19 Buys and 1 Hold. The average Uber Technologies stock forecast of $69.75 implies 87.2% upside potential. Shares have lost 27.1% year-to-date.
TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Uber’s performance.
According to the tool, compared to the previous year, the company’s website traffic registered a 4.3% rise in global visits in November. Moreover, the website traffic has increased around 14% year-to-date against the same period last year.