On Wednesday, Truist Securities increased the price target for Uber Inc. (NYSE:UBER) shares to $94 from $90, while maintaining a Buy rating on the shares. The revision comes after an analysis of the Truist Card Data, which the firm uses to gauge the performance of Uber's Mobility (Rides) and Delivery (Eats) segments. The data suggests that both segments are performing better than the consensus expectations.
According to the analyst, the positive trend observed in the card data led to an upward adjustment of the first-quarter 2024 estimates for Uber. The firm now anticipates Total Gross Bookings (GB), Revenue, and Adjusted EBITDA for the first quarter to reach $38.4 billion, $10.2 billion, and $1,333 million, respectively. These figures are an increase from the previous estimates of $38.0 billion in Total GB, $10.1 billion in Revenue, and $1,323 million in Adjusted EBITDA.
The updated projections also surpass the consensus estimates, which were set at $38.0 billion for Total GB, $10.1 billion for Revenue, and $1,311 million for Adjusted EBITDA. Furthermore, the new estimates are at the higher end of Uber's own guidance for the quarter, which forecasted Total GBs between $37.0 billion and $38.5 billion and Adjusted EBITDA ranging from $1,260 million to $1,340 million.
The analyst attributes the increase in the price target to the revised estimates, which were derived using a Discounted Cash Flow (DCF) methodology. The new target reflects the firm's confidence in Uber's growth trajectory and its ability to outperform market expectations. The analyst's commentary underscores the positive momentum in Uber's key business areas as the primary reason for the uplift in the company's financial outlook for the first quarter of 2024.
InvestingPro Insights
Following the positive outlook provided by Truist Securities, recent data from InvestingPro further bolsters the case for Uber's promising trajectory. Notably, Uber's market capitalization stands at a robust $162.16 billion, reflecting the scale and market confidence in the company. Despite a high P/E ratio of 85.18, the PEG ratio of 0.74 indicates that Uber's earnings growth is expected to outpace its P/E ratio, suggesting that the company may not be overvalued in terms of its growth potential.
InvestingPro Tips highlight that analysts are optimistic about Uber's earnings, with six analysts revising their earnings upwards for the upcoming period. Additionally, Uber is predicted to be profitable this year, having been profitable over the last twelve months. This profitability, combined with a strong return of 154.44% over the last year, positions Uber as a prominent player in the Ground Transportation industry.
For investors seeking more detailed analysis and additional insights, there are over 15 InvestingPro Tips available for Uber. To gain access to these valuable tips, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. The insights provided could be instrumental in making informed investment decisions about Uber's stock.
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