Key Takeaways
- Uber Technologies shares jumped 4% in intraday trading Friday following a price-target increase from Jefferies, which set its new goal for the stock at $100, up from $95.
- Jefferies analysts wrote in a note Friday that Uber’s Mobility division should continue to grow as the company introduces new ways to book trips, and the customer base for its existing services continues to rise.
- A Wedbush Securities survey posted Thursday also featured consumers saying they used Uber for all their rideshare needs at a higher rate than other platforms like Lyft.
Uber Technologies (UBER) shares rose Friday after Jefferies research analysts raised their price target on the stock to $100 from $95, citing the company’s continued creation of ways for people to use the app, particularly in its Mobility division.
Compared with early in the company’s life when it only had a few Mobility options like Uber Black or UberX, Jefferies analysts noted that Uber now has approximately 20 methods users can use to reserve trips, which can help build the app’s customer base. The company operates in two sectors, ridesharing and food delivery, each with addressable markets of about $1 trillion, and analysts wrote that Uber only has about 5% penetration into each market, leaving massive room for growth.
The analysts, who affirmed their “buy” rating, also increased some of their long-term projections for full-year 2024 and 2025 revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA) to account for their optimism on Uber’s newest offerings, putting them about 2% to 5% higher than the consensus Wall Street estimates for Uber’s growth.
Uber was also mentioned in a Thursday survey posted by Wedbush Securities analysts, in which consumers said they use Uber for all their rideshare needs at a higher rate than any other service like Lyft (LYFT). Consumers also told Wedbush they anticipate their usage of the services will increase or remain the same this year, indicating growing demand in the industry that could further boost Uber’s business.
“We expect a growing portion of Mobility growth to be driven by improved penetration in new verticals such as Reserve, Taxis, Moto, Auto, and UberX Share,” the Jefferies analysts wrote, referring to newer Uber products.
Reserve is a product that allows users to schedule a date and time for a ride in advance, while Taxis is a feature available in some cities to rent a normal taxi through Uber, as Uber says it wants to get “every cab in the world” on its app by 2025, the analysts wrote. Moto and Auto are features for reserving two- and three-wheel vehicles, primarily in Latin America and India, and UberX Share is a newer version of the Uber Pool feature, offering discounted rides shared with other Uber customers.
Jefferies analysts projected that increased adoption in Uber’s “New Bets,” as it called the newer features, can increase overall bookings and revenue while improving the company’s EBITDA and profit margins.
Uber stock rose almost 4% to $77.84 at 1:18 p.m. ET Friday, and has gained 33% so far in 2024 and about 150% in the last 12 months.