UBER is a “must own” stock, Roth says

It returned 149 per cent in 2023, but Roth MKM analyst Rohit Kulkarni thinks there is still money to be with UBER (UBER Stock Quote, Chart, News, Analysts, Financials NYSE:UBER).

“Uber’s shares were +149% in 2023 vs. S&P 500 +24%. During 2023, ’24/’25 Gross Bookings estimates increased by 2%/2% respectively whereas ’24/’25 EBITDA estimates increased by 16%/10%. Uber’s EV/EBITDA multiple (1-Yr forward) went from ~18.0x to ~22.0x during 2023,” the analyst said. “Uber was our top mid-large cap Internet pick in 2023, and we continue to believe Uber is a must-own, yet a relatively under-owned >$100bn market cap company. We roll forward our valuation framework to ’25.”

In a research update to clients January 17, the analyst maintained his “Buy” rating on Uber but raised his price target on the stock from $62.00 to $72.00.

Kulkarni thinks UBER will post EPS of $1.14 on revenue of $42.9-billion in fiscal 2024. He expects those numbers will improve to EPS of $1.97 on a topline of $49.6-billion in fiscal 2025.

“Our price target of $72 is based on 19x ’25E EBITDA,” the analyst concluded. “There are always risks that the target price for any security will not be realized. Factors that would cause the stock to deviate from our target price could come from sales and profits materially above or below forecasts, the relative success of other competitive products, and volatility related to consumer behavior trends on ridesharing and food delivery platforms.”