California-based Uber Technologies (UBER) operates in more than 60 countries and offers rideshare and package delivery services. In a business expansion move, it recently acquired online alcohol marketplace Drizly for $1.1 billion in cash and stock.
With this in mind, let’s look at the company’s recent financial performance and understand what has changed in its risk factors. (See Top Smart Score Stocks on TipRanks)
Q3 Financial Results
Uber reported revenues of $4.8 billion for the third quarter of 2021 against $2.8 billion in the same quarter last year. It posted a loss of $1.28 per share, compared to a loss of $0.62 per share in the same quarter last year. Uber ended the third quarter with $6.5 billion in cash and $9.3 billion in long-term debt. (See Uber Technologies stock charts on TipRanks).
According to the new TipRanks’ Risk Factors tool, Uber’s main risk categories are Finance & Corporate and Legal & Regulatory, which account for 26% and 25%, respectively, of the total 61 risks identified for the stock. The company recently updated its risk profile with one new risk under the Macro and Political risk category.
The company has told investors that it has made several climate change commitments and is also subject to various climate change regulations. Its commitments include powering its U.S. offices with 100% renewable electricity by 2025 and achieving net-zero emissions across its operations by 2040.
Highlighting regulatory challenges, the company says California requires rideshare fleets to ensure that electric vehicles account for 90% of their mileage by 2030. Uber cautions that any failure to meet its commitments and regulatory requirements on climate change could harm its reputation, increase its costs, and adversely impact its business.
The Finance & Corporate risk factor’s sector average is at 44%, compared to Uber’s 26%. Shares of the company have declined about 15% year-to-date.
Following Uber’s third-quarter earnings report, JMP Securities analyst Ronald Josey reiterated a Buy rating on the stock and raised the price target to $80 from $77. Josey’s new price target suggests 84.42% upside potential.
Consensus among analysts is a Strong Buy based on 19 Buys and 1 Hold. The average Uber Technologies price target of $69.75 implies 60.79% upside potential to current levels.