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Is Uber stock a buy? (May, 2024)

Uber Stock

Following the release of the company’s first quarter results, Roth MKM analyst Rohit Kulkarni has maintained his “Buy” rating on Uber (Uber Stock Quote, Chart, News, Analysts, Financials NYSE:UBER).

On May 8, Uber reported its Q1, 2024 results. The company posted Adjusted EBITDA of $1.4-billion on revenue of $10.1-billion, a topline that was up 15% year-over-year.

“Our results this quarter once again demonstrate our ability to deliver consistent, profitable growth at scale,” said CEO Dara Khosrowshahi. “More than 7 million people now choose to earn flexibly on Uber every month, with driver earnings of $16.6 billion continuing to grow faster than our topline.”

The analyst summarized the quarter.

“Uber reported mixed 1Q results with gross bookings slightly below high-end expectations while revenue and adj. EBITDA were ahead of consensus,” he wrote. “FX headwinds & equity investments added to below-the-line noise as Uber swung to a GAAP loss, ironic after being included in S&P 500. Yet, we believe potential for Uber to cross-sell and add new products to core segments and growing subscriptions and advertising remain underappreciated.

In a research update to clients May 10, Kulkarni maintained his “Buy” rating on UBER but lowered his price target on the stock from $91.00 to $89.00.

The analyst thinks UBER will post EPS of $0.82 per share on revenue of $43.4-billion in fiscal 2024. He expects those numbers will improve to EPS of $2.26 on a topline of $50.0-million in fiscal 2025.

“Uber’s shares were down as much as -10% on the day of earnings, and have recovered some of its losses since then,” the analyst noted. “As a quick downside scenario valuation support exercise: UBER generated $4.2bn in FCF during TTM, and will likely generate >$5.5bn in 2024 and >$7bn in 2025. A mid-$60s stock price implies 20x ’25E FCF, or a trough valuation on reasonable assumptions, in our opinion.”

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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