Tigress Financial Partners upgraded its outlook on Uber Inc. (NYSE:UBER) on Friday, raising its 12-month price target to $96 from the previous target, while maintaining a Buy rating on the stock.
The review follows Uber’s announcement of its first $7 billion share repurchase authorization and comes after the company reported its first profitable year.
The company highlighted Uber’s continued dominance in the ridesharing and delivery industries as key drivers for user growth and increased usage frequency. These factors are expected to contribute to strong booking growth trends over the next three years. Uber’s expansion into additional business lines, such as grocery and retail, is also seen as a significant contributor to growth, with gross grocery and retail bookings now worth $7 billion .
Uber’s strategy to enhance its ridesharing and delivery platform with new product innovations, particularly focusing on subscription services and advertising revenue, is considered part of its core growth strategy. The use of artificial intelligence (AI) to optimize service platforms and customer engagement is expected to further improve the company’s performance.
The report also highlights that Uber’s ability to cross-leverage its customer base between rideshare and delivery services has been effective. Approximately 31% of Uber Eats customers came from the Rides app, and 22% of first Mobility trips came from Uber Eats users. The Uber One membership program, which boasts 19 million members in 25 countries, also stands out for its significant contribution to the delivery of gross bookings and member spend.
Finally, Uber’s continued investment in research and development (R&D), new product introductions, and strong brand equity are recognized as factors that will continue to drive trends in business performance, economic cash flow, and return on investment. capital. This is expected to lead to increasing economic profit and long-term shareholder value creation. The company sees a potential return of 35% from current levels at the new price target.
Insights on InvestingPro
Uber Technologies Inc . (NYSE:NYSE:) has shown promising financial metrics that align with Tigress Financial Partners’ positive outlook. The company’s market capitalization stands at $144.32 billion, reflecting investor confidence. Notably, Uber’s net income is expected to grow this year, an optimistic sign for potential investors. This is in line with the company’s first profitable year and could be a contributing factor to Tigress Financial’s price target increase.
Investors may also find Uber’s valuation metrics interesting. While the company’s price-to-earnings (P/E) ratio is high at 75.37, its PEG ratio, which measures P/E over earnings growth, is more moderate at 0.67, suggesting that the company’s earnings growth could justify the higher price-to-earnings (P/E) ratio. P/E ratio. Furthermore, Uber’s significant revenue growth of nearly 17% over the trailing twelve months as of Q1 2023 indicates solid expansion of its business operations.
For those thinking about adding Uber to their portfolio, there are others Professional investment tips to explore, such as the company’s position as a prominent player in the ground transportation industry and its high performance over the past year. Investors can unlock additional insights and tips on Uber using the coupon code PRONEWS24 to get an additional 10% discount on an annual or biennial Pro and Pro+ subscription, where 12 more InvestirePro Suggestions are available to guide investment decisions.
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