Is Uber Stock Ready to Step on the Gas?

Uber Technologies Inc. (NYSE: UBER) is scheduled to release its fourth-quarter financial results after the markets close on Thursday. The consensus estimates call for a net loss of $0.67 in EPS and $4.06 billion in revenue.

Uber’s last earnings report came with an acknowledgment that profits do ultimately matter, and Uber’s new target was to be profitable by the end of 2021, at least on an EBITDA basis.

While Uber is in the midst of losing money on every single transaction it embarks on in an effort to capture more market share, one independent research firm is calling a bottom in the stock. Argus, which relies on no commissions and no underwriting to support its research reports, has raised Uber to Buy from Hold.

As far as this latest upgrade from Argus, Uber is viewed as having an improving competitive landscape in its core rides/Eats markets. The firm notes that Uber currently holds roughly 33% market share of the global ride-hailing industry, giving it efficiencies as the established leader and also leaving room for further growth.

Argus also pointed out that in the busted-IPO climate of unicorns in 2019 (Uber, Lyft, Slack, Beyond Meat and Pinterest), they have fallen. The firm sees this pullback reflecting a shift in sentiment that has seen growth stocks fall out of favor, but Argus views the Uber selloff as a buying opportunity because its own fundamentals remained intact despite a slide in its share price.

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Overall, Uber stock has outperformed the broad markets with a gain of about 24% year to date. In the past quarter alone, the stock is up about 18%.

Here’s what analysts were saying ahead of the report:

• Morgan Stanley has an Overweight rating and a $57 price target.
• Wedbush has an Outperform rating with a $50 price target.
• JPMorgan rates it as Overweight with a $51 price target.
• UBS has a Buy rating with a $56 target price.
• Guggenheim has a Buy rating and a $45 price target.
• The Barclays Buy rating comes with a $44 price target.

Uber stock traded at $37.14 on Thursday, in a post-IPO range of $25.58 to $47.08. The consensus price target is $45.08.

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