Uber Technologies, Inc.

UBER Details

Uber Technologies, Inc. (NYSE: UBER) is a technology company that connects passengers to drivers, hungry individuals to restaurants and food delivery services, and shippers to carriers. The firm's on-demand technology platform might potentially be utilized for additional products and services such as autonomous vehicles, drone delivery, and Uber Elevate. 

Latest News:

• Growth Program: UBER and VISA, a global leader in digital payments, announced Grants for Growth on January 10, 2022, a program that would award USD 1 million in grant financing to small companies in ten US locations already active on Uber Eats. The program, which focuses on restaurant rehabilitation and entrepreneurship, was designed to help merchants when they needed it the most.
• Strategic Collaboration: Motional, a global leader in driving technology, and UBER announced a partnership on December 16, 2021, to begin autonomous deliveries for UBER clients in Santa Monica in early 2022. Motional's all-electric trucks will make Uber Eats deliveries of a curated set of meal kits from chosen restaurants.

9MFY21 Results:

• Growth in Revenues: UBER's revenue increased by 46.44% to USD 11.68 billion during 9MFY21 (ended September 30, 2021), compared to USD 7.97 billion during 9MFY20, due to an increase in food delivery orders and larger basket sizes as a result of stay-at-home order demand related to COVID-19, and continued expansion across US and international markets.
• Drop-in Losses: During 9MFY21, the company had witnessed a decline in net losses to USD 1.39 billion vs. USD 5.80 billion during 9MFY20.
• Leveraged Balance Sheet: As of September 30, 2021, the company had cash and cash equivalents of USD 6.48 billion and total debt of USD 9.28 billion.
• All-time High Gross Bookings: UBER reported a 56.75% growth in gross bookings to USD 23.11 billion in Q3FY21 from USD 14.75 billion in Q3FY20.

Key Risks:

• Geographic Concentration Risk: In FY20, only five metropolitan areas accounted for 22% of UBER's mobility gross bookings: Chicago, Los Angeles, and New York City in the United States, Sao Paulo in Brazil, and London in the United Kingdom. Because of its geographic concentration, economic, social, weather, and regulatory conditions in these large metropolitan areas impact its operations and financial outcomes.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

UBER Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

UBER's share price has fallen 32.11% in the past nine months and is currently leaning towards the lower band of its 52-week range of USD 34.88 to USD 64.05. . The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 36.90. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 46.12.

Considering the significant correction in the stock price, strong revenue track record, new partnerships, and current valuation, we recommend a "Buy" rating on the stock at the closing price of USD 37.86, down 1.43% as of January 19, 2022.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.