Uber is everywhere. People all over the world know what it is, even if Uber or its subsidiaries do not operate in their country. It's such a cool brand that it has become synonymous with the word "taxi". But instead of rising, Uber stock has fallen 23% since its IPO in 2019. Could this be a good time to buy stock and capitalize on the famous brand? Let's take a look.
Uber's shareholders are probably in a good mood right now – over the past six months, the stock has risen 16% in a rough market environment. The reason for this growth was the financial report, which exceeded analysts' expectations. Although it's not just financials that can affect stock prices, there are many other economic events as well. You won't miss any of them if you use specialized trading tools. One such tool is the economic calendar – it shows all the major (and minor) events that you will find useful to follow.
The latest financial report showed that Uber continues to grow – the company ended 2022 with 131 million monthly users, a record high. In addition, the company's 2022 revenue grew 83%, and its adjusted EBITDA rose from a loss to a profit of $1.7 billion.
Along with its strong 2022 performance, Uber has a brilliant financial outlook for the near future. Analysts believe the company's revenue will grow another 16%, and adjusted EBITDA is likely to grow as well. Among the reasons for these forecasts are Uber's cost-cutting policy and the reduction of inefficient divisions in different regions.
Another key factor in the company's success is Uber's ability to adapt quickly in difficult economic conditions. The company reorganized its business processes during the Covid pandemic. Not surprisingly, cabs were not very popular when everyone was locked up at home. But people still needed to order groceries or ready-to-eat food, so UberEats became a priority for the company. Now, in the post-Covid era, its cab business is back at the top of the list.
Uber has found another opportunity to diversify its business. Have you heard of Uber Freight? It's like ordering a cab – but for cargo transportation. This segment grows year by year (faster than all other directions), and the mobile application Uber Freight already counts more than 200 thousand users.
All of the above facts give analysts a reason to believe that Uber shares are undervalued. The consensus forecast for these shares is +54% over the next 12 months.
Some might think this is a "shut up and take my money" call – but you have to remember that buying or selling any asset without doing your own analysis is always a bad idea. Especially when the world markets and political situation are uncertain. Doing your own research is Rule #1 every trader should follow.
This article was written in cooperation with TradingView