Uber Technologies is a Buy, says Roth

Another bang-up quarter from Uber Technologies (UBER Technologies Stock Quote, Charts, News, Analysts, Financials NYSE:UBER) has Roth Capital Partners analyst Rohit Kulkarni riding high on the stock. The analyst kept a “Buy” rating in a Wednesday report to clients along with a 12-month target of $43.00 per share, good for a projected one-year return at the time of publication of 23.2 per cent.

Uber shares jumped on Wednesday with the release of the ride hailing and delivery company’s fourth quarter and full year 2022 results, which featured revenue up 49 per cent year-over-year to $8.61 billion. Adjusted EBITDA took a big leap from $86 million a year earlier to $665 million, and management guided for Q1 2023 gross bookings in the range of $31.0 to $32.0 billion and adjusted EBITDA of between $660 and $700 million. (All figures in US dollars.)

“We ended 2022 with our strongest quarter ever, with robust demand and record margins,” said Dara Khosrowshahi, CEO, in a press release. “Our global scale and unique platform advantages position us well to accelerate this momentum into 2023.”

Kulkarni said the Q4 results arrived better than expected, with the $8.61 billion topline outpacing the Street’s forecast at $8.51 billion, while EBITDA at $665 million was also higher than the consensus $620 million.

The analyst noted Uber’s monthly active platform consumers (MPAC) hit a record high of 131 million, while ad revenues now represent a run rate of over $500 million. Uber reported about 23 million trips per day on average, which was up 19 per cent year-over-year to 2.1 billion for the quarter.

“Uber reported another clean beat 4Q earnings result and provided 1Q ex-FX bookings growth guidance above the Street along with a 1Q EBITDA outlook well above our/Street expectations,” Kulkarni said.

“Uber remains our top Long idea for 2023, and today’s results demonstrate continued fundamental strength in the business,” he said.

Breaking down the numbers, Kulkarni noted Uber’s Mobility segment saw gross bookings of $14.9 billion compared to the Street’s estimate at $14.83 billion, while in its Delivery business gross bookings at $14.32 billion were a hair above the $14.30 consensus call.

Kulkarni said the key positive from the first quarter guidance was the EBITDA call at between $660 and $700 million, which was well above the consensus expectation of $612 million.

“Uber shares are +41 per cent year-to-date versus the S&P 500 plus nine per cent. We expect Uber shares to hold these gains over the near term,” Kulkarni wrote.