However, as you can see in the chart below, shares still lag the S&P 500 by a wide margin since Uber went public in 2019. In what appears to be a case of “buy the rumor, sell the news,” Uber Technologies (UBER) stock languished in its Monday debut as a component of the S&P 500 even as the market enjoyed broad-based gains. © 2024 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed.
Uber’s management team has worked hard to swing the company into profitability while maintaining strong growth in its ride-hailing and food-delivery businesses. Below, I’ll explain why its stock is a buy now and what joining the S&P 500 could mean for investors. Of the 48 analysts issuing opinions on Uber stock surveyed by S&P Global Market Intelligence, 32 rate it at Strong Buy, 14 say Buy and two call it a Hold. That works out to a rare consensus recommendation of Strong Buy. The Street is particularly excited about Uber’s growth prospects. Analysts forecast Uber to generate average annual earnings per share (EPS) growth of 68% over the next three to five years.
Uber paid its human drivers $16 billion last quarter, so self-driving cars could eliminate that cost and transform the company’s economics. Besides the encouraging buyback news, there’s a good chance that Uber stock is getting a boost from Lyft’s better-than-expected fourth-quarter results and guidance. Lyft recorded adjusted earnings per share of $0.18 on sales of $1.22 billion, with profits in the period coming in much better than the average analyst estimate for per-share earnings of $0.08. 29 Wall Street analysts have issued “buy,” “hold,” and “sell” ratings for Uber Technologies in the last twelve months.
The company also expanded its Taxi segment in New York City, so any customer who books an UberX can have the ride fulfilled by a yellow cab. Uber disrupted the traditional taxi industry when it burst onto the scene, and now it stands to profit from what’s left. Index Committee, which reviews the S&P 500 and its components periodically. It takes a few other things into account, including sector weighting — the S&P 500 is a diversified index, so the committee wouldn’t nominate 400 stocks from the technology sector alone, for example. UBER stock is up about 7% since S&P Dow Jones Indices said on December 1 the ridesharing company would replace Alaska Air Group (ALK) in the most commonly used benchmark for U.S. equity performance. When a company buys back its own stock, it typically retires those shares, reducing the total number of shares outstanding.
Why Uber Stock Is Soaring Today
Indeed, more than $11.4 trillion in assets are indexed or benchmarked to the S&P 500, according to S&P Dow Jones Indices. Anytime a company is included in the S&P 500, every investment vehicle following the index has to buy its stock. In the recent third quarter of 2023 (ended Sept. 30), customers booked $17.9 billion in rides, which was a 31% increase year over year. They also spent $16.1 billion on the Uber Eats food delivery platform, but that marked a much slower growth rate of 18%.
It also unveiled a carpooling feature in the San Francisco Bay Area, which soon spread to other cities globally, enabling passengers to share rides and save on fares. 29 brokerages have issued 12-month price targets for Uber Technologies’ shares. On average, they anticipate the company’s stock price to reach $73.75 in the next twelve months.
- Uber published a press release before the market opened this morning announcing that it would be buying back stock for the first time in its history.
- Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
- In the longer term, Uber is preparing for autonomous self-driving vehicles to enter the mobility industry at scale.
- Uber’s current CEO is Dara Khosrowshahi, who replaced co-founder Travis Kalanick of Uber in August 2017.
- 29 brokerages have issued 12-month price targets for Uber Technologies’ shares.
The company issued 180,000,000 shares at a price of $44.00-$50.00 per share. Uber Technologies saw a decrease in short interest in January. As of January 31st, there was short interest totaling 60,100,000 shares, a decrease of 16.2% from the January 15th total of 71,710,000 shares. Based on an average daily volume of 31,830,000 shares, the short-interest ratio is currently 1.9 days.
However, they must be included in its generally accepted accounting principles (GAAP) results by law, which is the method the U.S. Losing money is often a feature of modern technology companies, not a bug. Investors encourage them to burn cash to drive growth, even if it means suffering steep losses at the bottom line. The idea is to acquire lots of customers fast and eventually cut costs down the road to turn the business profitable. Such an outsized growth rate makes Uber stock, trading at 54 times the Street’s 2024 EPS forecast, a screaming bargain at current levels, bulls say. For the first quarter, Lyft expects bookings to come in between $3.5 billion and $3.6 billion, beating Wall Street’s previous call for bookings of $3.46 billion.
Uber Insider Activity
Through the first three quarters of 2023, Uber’s operating expenses came in at $10.5 billion, which was $100 million less than the year-ago period. Since Uber has 142 million monthly active customers on its platforms, it will be the go-to network for developers of autonomous vehicles who want to access the largest possible audience. A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. As a senior writer at AOL’s DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.
This budget-friendly alternative permitted drivers to use their cars provided they passed background checks and met insurance, registration and vehicle quality standards. UberX expanded to 35 cities within a few months, demonstrating its popularity among cost-conscious riders. In August 2014, Uber extended its services by introducing Uber Eats, a food delivery platform.
Uber debuted in San Francisco in 2011, opening its services and mobile app to the public after beta testing in May 2010. Initially, the application hailed black luxury cars, which cost about 1.5 times as much as a regular taxi. In response to San Francisco’s taxi operators’ objections, the company changed its name from UberCab to Uber in the same year. Uber published a press release before the market opened this morning announcing that it would be buying back stock for the first time in its history. The announcement said that the company’s board of directors had authorized up to $7 billion in share repurchases. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
UBER Stock News Headlines
The Uber-in-the-S&P 500 trade is over, but Wall Street analysts remain uber bullish on Uber stock as a longer term holding, too. Uber (UBER -1.33%) stock is posting big gains in Wednesday’s https://www.dowjonesrisk.com/ trading. The company’s share price was up 11.4% as of noon ET today, according to data from S&P Global Market Intelligence. (UBER) raised $8.5 billion in an IPO on Friday, May 10th 2019.
Uber Stock FAQ
However, the biggest tailwind for Uber’s bottom line was the change in the value of its investments. The company owns an equity stake in at least five different start-ups, and their value plunged in 2022 amid the tech bear market. It dealt a $9.9 billion blow to Uber’s financial results in the first nine months of that year, which swung to a $493 million profit in 2023. It recently launched Group Rides in 100 cities globally, which means friends traveling to the same destination can book one ride to pick them up, even if they are in different locations.
View analysts price targets for UBER or view top-rated stocks among Wall Street analysts. In the longer term, Uber is preparing for autonomous self-driving vehicles to enter the mobility industry at scale. It signed a number of partnerships with developers of the technology, including Alphabet’s Waymo, which already offers autonomous rides through Uber in Phoenix, Arizona.
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In August 2016, DiDi acquired Uber’s business operations in China, and in exchange, Uber obtained an 18% equity stake in DiDi. DiDi also pledged to invest $1 billion in Uber as part of the agreement. Later that year, Uber purchased Ottomotto, a startup specializing in developing autonomous trucks. The acquisition was valued at $625 million, and the founder of Ottomotto, Anthony Levandowski, was previously accused of stealing trade secrets from his former employer, Waymo, to establish the company. In the same year, Uber also bought Geometric Intelligence, the cornerstone of “Uber AI,” a department dedicated to exploring and researching AI technologies and machine learning. The resurgence of its mobility business was a huge factor because it gave Uber more revenue to work with, but the company also carefully managed costs this year to shore up its bottom line.
With average gains of 150% since the start of 2023, now is the time to give these stocks a look and pump up your 2024 portfolio. Uber was founded in 2009 by Oscar Salazar Gaitan, Travis Kalanick and Garrett Camp and was initially named Ubercab Inc. The idea for Uber came about after Camp and Kalanick spent a pricey $800 hiring a private driver on New Year’s Eve, and Camp needed help finding a taxi on a snowy night in Paris. Camp, Oscar Salazar and Conrad Whelan built the prototype for Uber’s mobile app, with Kalanick as the chief advisor to the company.