Uber Technologies (UBER:NYE) Fundamental Analysis is very bearish

Uber stock is currently rated with a fundamental score of 1.1 out of 10, where 0 is very bad and 10 is very good.

UBER Stock Analysis:

25 analysts have provided stock projections for Uber Technologies Inc., and the average analyst target for the company over the next 12 months is USD 45.44. Strong Buy is the current consensus analyst recommendation for the stock. Uber stock analysis by Stock Target Advisor is Bearish and is based on 1 positive and 8 negative signals. The stock price of Uber Technologies Inc. was USD 26.57 at the most recent closing. The stock price of Uber stock has changed by -3.91% over the previous week, +0.26% over the previous month, and -39.37% over the previous year.  The Crowd target for the stock is $34 share, with a consensus Crowd Hold rating on the company’s stock.

About Uber:

Uber Technologies, Inc. creates and manages unique technological applications in the Americas, Europe, the Middle East, Asia Pacific, Latin America, and Africa. It links users and other customers to independent transportation service providers for ridesharing services, as well as to restaurants, grocers, and other retailers with delivery service providers for services like meal preparation, grocery delivery, and other delivery services. Mobility, Delivery, and Freight are the three business divisions that make up the organization. The Mobility section offers services that link customers with mobility drivers that offer rides in a variety of vehicles, including cars, auto rickshaws, motorcycles, minibuses, and taxis. Additionally, it provides collaborations in finance, transit, and automobile solutions. The Delivery category offers grocery, alcohol, and convenience store delivery in addition to a limited selection of other products. Customers can use this segment to find local restaurants, place orders, and either pick up their meals from the restaurant or have them delivered. The company’s platform is used by the freight segment to link carriers and shippers and give them access to transportation management, other logistics services, upfront, transparent pricing, and the ability to schedule shipments. In February 2011, the business, which was formerly known as Ubercab, Inc., changed its name to Uber Technologies, Inc. San Francisco, California serves as the company’s headquarters. Uber Technologies, Inc. was established in 2009.

News:

Uber Technologies Inc. just released their earnings report, and the stock jumped on the news after the company reported that it’sthird-quarter revenue exceeded the expectated forecasts, regardless of the fact that its loss was four times higher than analysts had previous suggested it would be.

In comparison to forecasts for a 21-cent loss, the company lost 61 cents per share, 40 cents about estimates. This loss included nearly $1 billion in revaluations of the company’s equity assets and stock-based compensation costs. Surpassing expectations, revenue increased 72% to $8.3 billion thanks to Uber Freight’s acquisition of Transplace and modifications to the company’s UK Mobility business model. Additionally, the company’s ride-hailing growth picked up.

After experiencing a rise in online purchase volumes during the pandemic, Uber’s delivery division is now experiencing slower sales growth. The company stated that daily journeys increased by nearly 21 million or 19% during the third quarter. Growth was driven by mobility gross bookings, which increased by 38% compared to 7% for delivery gross bookings. Gross bookings are an indicator of how much money was made overall by the combined ride-hailing, delivery, and freight-shipping operations of Uber.

Uber executives stated that despite a 7 percent currency headwind, the company is anticipating fourth-quarter gross bookings to increase by 23% to 27% to between $30.0 billion and $31.0 billion, and earnings in the range for adjusted EBITDA  from about $600 million to $630 million.

 

Fundamental Stock Analysis:

Positive Fundamentals:

High market capitalization: This organization is among the top quartile and is one of the biggest in its industry. These businesses are typically more reliable.

Negative Fundamentals:

Low Returns:  In comparison to its rivals, this company’s risk-adjusted return performance is below average. The returns are unpredictable, even if it is outperforming in terms of returns. Be careful as you go.

High Volatility:  Over the past five years, this company’s total returns have been erratic and higher above the industry average. If you plan to invest in such a stock, be sure your risk tolerance is adequate.

Lower than average dividend returns:  In comparison to its competitors, the company’s average income yield during the past five years has been low. If you are not seeking for work, it is not an issue.

Excessive in comparison to wages:  The stock is trading above the sector median and at a premium to its peers in terms of price to earnings.

Compared to book value, it is overpriced: On a price to book value basis, the stock is selling at a premium to the median of its peer group.

Extremely leveraged:  In terms of debt to equity, the company is heavily leveraged and in the bottom half of its sector rivals. Check the news, though, and study the sector and management remarks. This can be high at times since the business is attempting to grow quickly.

Poor cash flow:  The last four quarters saw a negative total cash flow for the organization.

Free cash flow that is negative:  In the last four quarters, the company’s overall free cash flow was negative.

Uber stock is currently rated with a fundamental score of 1.1 out of 10, where 0 is very bad and 10 is very good.

 

Uber (UBER:NYE) Stock falls on news, fundamental analysis is bearish

Uber discontinued its operational services in five cities within Pakistan effective immediately.

UBER Stock Forecast News

Uber Technologies Pakistan based unit has discontinued it’s operational services which are effective immediately in five cities within Pakistan.  The cities in which Uber’s app is idle  includes, Karachi, Islamabad, Multan, Faisalabad and Peshawar.  Spokes people at the company said the move will reduce market overlap between the American tech giant and its Middle Eastern unit, Careem. The global ride sharing and delivery giant, Uber Technologies acquired it’s  rival Careem for just over $3 billion in March of 2019.

The company stated that existing Uber drivers and riders in the aforementioned five cities can easily transfer to the app operated by Careem unit, which is based out of Dubai.

The news comes on the heels on the country facing an economic meltdown, which has be amplified  by devastating floods over the summer period in which over 1700 people were tragically taken,  The financial cost is estimated at over $30 billion in property damage.

Uber firmly assured it’s employees, drivers, riders, and partners that the company would mitigate the inconvenience as much as possible within the cities that are affected.  The company also stated that the Uber app would remain functional in Lahore for the time being.

Analysts believe that the savings as a result of the merging of the 2 companies within these geographic centers, will help simplify the customer base and dramatically reduce operational costs within Pakistan as a result.

However, news of Uber’s former chief security officer found guilty of covering up a 2016 data breach weighed in on investor sentiment. In 2016, hackers gained access to Uber’s data, and as a result exposed tens of millions of customer’s private information.

Federal prosecutors announced that a federal jury in San Francisco Bay area convicted the former Uber executive, Joseph Sullivan with the crime of obstructing justice and knowingly concealing information relating to a federal crime to avoid the negative financial impact it would have on the companies publicly traded stock.

The lawsuit was considered the first criminal case of such a matter which involved a company executive on the improper handling of a data breach, which was closely tracked within the cybersecurity community as the outcome would likely set a precedent in future cases of this nature, as these types of legal cases are relatively new without much historical legal data to follow from.

In 2017 Uber’s board of directors fired Sullivan  for his actions regarding the incident. Prosecutors have stated that Sullivan had purposely taken the necessary steps to make sure that all of the data which was exposed during the criminal hack, was not disclosed to the public.

Court documents show that 2 of the hacker’s approached Sullivan’s team to warn Uber of the security gap that allowed customer’s private information to be revealed.

The documents state that possibly the  personal information of almost 60 million drivers and rider’s on Uber’s app platform were exposed.  One of the hackers testified at the trial, and said he rejected the company’s offer of $ 10,000 to essentially keep the breach a private matter.

Effect of Uber stock forecast news

Uber’s stock was down over 10 percent on Tuesday as a result of all of the news.  Analysts so far have not responded to the news with changes to it’s ratings on the company.

Uber Stock Forecast Analysis:

Based on the Uber stock forecast from 24 analysts, the average analyst target price for Uber is USD 45.09 over the next 12 months. 

Uber average analyst rating is Strong Buy. Stock Target Advisor’s own stock analysis of Uber is Bearish, which is based on 1 positive signals and 8 negative signals.

At the last closing, Uber stock price was USD 27.53Uber stock price has changed by +3.03% over the past week, -13.37% over the past month and -42.37% over the last year.

Latest Analyst Ratings on Uber:

Maintains Morgan Stanley Overweight USD 70 » USD 54 2022-10-03
Target Raised by Atlantic Securities USD 40 2022-08-22
Target Down Deutsche Bank Capital USD 40 2022-08-09
Target Raised by Cowen USD 76 2022-08-09
Maintains Barclays Overweight USD 53 » USD 54 2022-08-03
Maintains Mizuho Securities Buy USD 58 » USD 46 2022-08-03
Maintains UBS Buy USD 50 » USD 36 2022-08-03
Maintains Morgan Stanley Overweight USD 68 » USD 70 2022-08-03
Maintains Needham & Company LLC Buy USD 50 » USD 52 2022-08-03
Target Raised by Susquehanna Bancshares USD 29 » USD 32 2022-08-03
Upgraded by Raymond James Capital Market Perform »
Outperform USD 38 2022-08-03
Maintains Deutsche Bank Capital Buy USD 50 » USD 40 2022-08-01
Target Lowered by MKM Partners Buy » Buy USD 41 » USD 32 2022-07-27
Maintains BTIG Research Buy USD 55 » USD 35 2022-07-19
Maintains Citigroup Buy USD 50 » USD 48 2022-07-14
Initiates Coverage On KeyBanc Sector Weight 2022-07-13
Adjusts STA Research Underperform USD 17 2022-07-13
Maintains JP Morgan & Company Overweight USD 60 » USD 48 2022-06-29
Reiterated by Wedbush Outperform USD 38 2022-06-29
Maintains Wolfe Research Outperform USD 30 » USD 27 2022-06-24
Target Down STA Research Hold USD 30 » USD 25 2022-06-24
Maintains Goldman Sachs Buy USD 55 » USD 45 2022-06-10
Maintains Barclays Overweight USD 48 » USD 53 2022-06-08
Assigns STA Research Hold USD 30 2022-06-08
Maintains Jefferies Financial LLC Buy USD 65 » USD 50 2022-05-31

Positive Aspects of the Stock: 

The company has a high market capitalization, and is one of the biggest companies in the sector it operates. As a result the company is much more stable than companies with a smaller capitalization.

Negative Aspects of the Stock:

The company has poor risk adjusted returns that are much worse than it’s peers within the same space.  The company historically has choppy earnings, and as such are unstable and very unpredictable.

The company also has poor dividend returns in comparison to it’s peers, as well as the stock istrading at overpriced valuations compared to earnings.  The company also trades very high in comparison to it’s current book value, a very important metric.

As a result of the company’s previous growth strategy, it is highly leveraged as a result and is in considerable debt, which is a severe risk to the company’s balance sheet.  The company has both negative cashflow and negative free cash flow issues, which are also of a notable concern.

As a result of the negative aspects of the company’s fundamentals, the analysis is very bearish on the stock, and Uber is rated with a score of 1.1 out of 10, where 0 is very bearish and 10 very bullish.