On Thursday, BTIG maintained its Buy rating on Uber Inc. (NYSE:UBER) with a price target of $90.00. The firm's analysis follows recent developments from Tesla (NASDAQ:TSLA), which has been testing a rideshare service and plans to launch it in California and Texas next year. Despite Tesla's advancements in autonomous vehicle (AV) technology, BTIG holds its position on Uber, seeing a partnership between rideshare companies and AV developers as the most capital-efficient strategy.
Tesla's third-quarter earnings call revealed more about the company's rideshare ambitions than its earlier robotaxi presentation on October 10. The electric vehicle maker has been running a rideshare service for its employees in the San Francisco Bay area for nearly a year. This service is a precursor to a broader rollout planned for California and Texas in the coming year, marking Tesla's entry into the competitive rideshare market.
BTIG's commentary suggests that the initial reaction to Tesla's robotaxi day, which lacked detail, led to a belief that AV technology would likely complement existing rideshare services. However, Tesla's recent announcement indicates that AVs could pose a competitive threat to incumbents like Uber due to potential cost advantages.
Despite the perceived increase in competition from Tesla, BTIG sees a partnership model between AV developers and rideshare marketplaces as the most beneficial approach. The firm believes that while Tesla's moves raise the competitive threat level, it is still a future concern and does not currently impact their estimates for Uber.
In summary, BTIG's stance on Uber remains unchanged, with a Buy rating and a $90.00 price target. The firm acknowledges the potential threat from Tesla's entry into the rideshare market but believes that partnerships in the AV space could mitigate these competitive pressures.
In other recent news, Uber Technologies Inc . (NYSE:UBER) has been the subject of several financial firms' attention. BofA Securities has raised the price target for Uber's shares from $88 to $96, anticipating a strong third-quarter performance. The firm expects Uber's bookings to be $41.35 billion, revenue at $11.01 billion, and EBITDA at $1.67 billion, slightly above the Street's expectations.
On the other hand, Erste Group upgraded Uber's stock rating from Hold to Buy, reflecting confidence in the company's potential for significant revenue, operating income, and net profit increases in the upcoming quarters. TD Cowen maintained its Buy rating on Uber, emphasizing a strong Q3 EBITDA performance and projecting a 17.1% year-over-year increase in gross bookings for 2024.
Mizuho Securities sustained its Outperform rating on Uber shares amid potential acquisition talks with Expedia (NASDAQ:EXPE) Group Inc., while Truist Securities reaffirmed its Buy rating despite skepticism about the viability of such a deal. Uber has also been exploring growth opportunities beyond its core ride-sharing business, including a possible expansion into the grocery delivery market.
Recent developments highlight Uber's commitment to growth and innovation, including partnerships with autonomous technology startups like Avride and collaborations with Alphabet (NASDAQ:GOOGL)'s Waymo, Chinese firm WeRide, and Darden Restaurants (NYSE:DRI). Despite facing legal challenges, such as the U.S. Supreme Court's rejection of the company's appeal against California lawsuits alleging misclassification of drivers as independent contractors, Uber's resilience and adaptability are evident.
InvestingPro Insights
Uber's strong market position, as highlighted in the article, is reflected in the latest InvestingPro data. The company's market capitalization stands at an impressive $163.58 billion, underscoring its dominant role in the ground transportation industry. This aligns with BTIG's bullish stance on Uber, despite potential competition from Tesla's upcoming rideshare service.
InvestingPro Tips suggest that Uber is expected to see net income growth this year, which could further solidify its market position. Additionally, the company's revenue of $40.06 billion for the last twelve months as of Q2 2024, with a 14.44% growth rate, indicates robust financial performance. This growth trajectory supports BTIG's optimistic outlook and $90 price target for Uber.
It's worth noting that Uber's stock has shown a strong return of 80.65% over the past year, reflecting investor confidence in the company's business model and future prospects. This performance aligns with BTIG's view that Uber remains well-positioned in the rideshare market, even as new competitors like Tesla enter the space.
For investors seeking more comprehensive analysis, InvestingPro offers 14 additional tips for Uber, providing a deeper understanding of the company's financial health and market position.
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