Investors and analysts alike have been getting into Uber Technologies (NYSE: UBER) lately, and I’m not talking about hiring the ride-hailing leader for journeys. In the space of one week the company delivered a very strong earnings report and launched its first-ever share buyback program.
There’s a lot of optimism barreling down the road with Uber now, but it’s still to be seen whether there’s more share price appreciation left in the stock’s tank.
A 16% price target boost
Just after the second of those two events — the share buyback announcement — Deutsche Bank analyst Lloyd Walmsley made a significant increase to his Uber price target. In a fresh analyst note published Thursday he changed it to $95 per share, well above his previous estimation of $82.
Walmsley was inspired not only by Uber’s quite encouraging fourth quarter fundamentals and the buybacks, he felt management made the right pronouncements at the company’s investor day.
He was particularly cheered by their forecast of mid- to high-teen percentage compound annual growth rate (CAGR) in bookings on a currency-neutral basis over the next three years. He also liked the company’s projection of a notable rise in free cash flow (FCF).
The Deutsche Bank analyst concluded that “All of this, combined with management’s inaugural share repurchase program of $7 billion, which is expected to more than offset dilution over time, give us greater confidence in Uber’s ability to leverage its scale to drive significant profitable growth over the long term and prudently manage capital for shareholders.”
Winning the race
Given Walmsley continues to rate the stock a buy, and there is much to back his view, it’s clear that Uber has made some sensible moves recently. After all, management has pared the company down to more profitable operations and trimmed much of the fat. Moving forward, I’d imagine we’ll see more growth in bookings and revenue, in addition to satisfying numbers on the bottom line.
Should you invest $1,000 in Uber Technologies right now?
Before you buy stock in Uber Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Uber Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of February 12, 2024
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.
This Ride-Hailing Stock Has Nearly 20% Upside, According to 1 Wall Street Analyst was originally published by The Motley Fool