According to many professional and top investors in today’s stock market, there are stocks that are easy to spot early on before they become industry leaders. This is paramount to wealth creation because as these companies grow from mid-sized businesses to industry leaders, their stock prices tend to become multiples.
Uber Technologies today
Uber Technologies
(As of 1/2/2025 5:45 PM ET)
- 52 week range
- $54.84
▼
$87.00
- P/E ratio
- 31.43
- Target price
- $91.47
The way to recognize these names is easier than it seems. A common position is for company to become a verb. That’s when investors usually know when a stock is expected to rise massively in the coming years. Knowing this, it becomes clear that the shares Uber Technologies Inc. New York Stock Exchange: UBER fit into this category of challenging investments for the coming years, if not decades.
Now that shares are trading at just 70% of their 52-week high as markets believe Alphabet Inc. NASDAQ: GOOGLE could overtake Uber in ride-sharing market share, investors have their best shot at getting the name backed at the best price of the year. This is a fact that Wall Street analysts and institutional investors know all too well.
All Uber KPIs are very high
Every industry and company has its own key performance indicators (KPIs). However, when it comes to the technology sector, there is one that usually beats them all. And that has to do with the user base the company has grown and whether it continues to grow at the right pace.
As for Uber, investors can look at total bookings, which grew 16% over the past 12 months to $41 billion. As optimistic as this initial figure is, it is just the tip of the iceberg for Uber’s business and its future prospects. Total delivery bookings reached $18.7 billion, delivering another double-digit annual growth rate for Uber at 17%.
Of course, this is all driven by the company’s user base, which reflects Uber’s growth and market share gains. Monthly active users, a key driver of technology stock valuations, rose to 161 million in the third quarter of 2024, up 13% from 142 million last year.
Putting all of this together, investors are looking at 20% net revenue growth, and it’s clear that Uber stock shouldn’t be that low today compared to its 52-week highs. However, as important as revenue is, there is another financial metric that investors can point to to justify the stock’s growth potential today.
This is free cash flow (operating cash flow minus capital expenditures). That figure rose to $2.1 billion in the quarter, up 133% from a year earlier, and speaks volumes about Uber’s current profitability.
Market sentiment turns bullish on Uber stock
With this free cash flow, management decided to commit up to $375 million to its share repurchase program, signaling to investors and markets that not only is the stock cheap today, but its value is expected to rise in the near future. However, insiders weren’t the only ones keen to express their optimism.
Uber Technologies stock forecast today
$91.47
Growth potential 44.80%Moderate purchase
Based on ratings from 38 analysts
| High forecast | US$120.00 |
|---|---|
| Average forecast | $91.47 |
| Low forecast | $77.00 |
Uber Technologies stock forecast details
Representatives of Geode Capital Management decided to increase their holdings in Uber shares by as much as 2.1% as of November 2024; this new addition would bring their position to $3.2 billion today, or 2% ownership in the company. Wall Street analysts, no matter how scared they may be to lift sagging shares, don’t seem to have a problem with Uber.
That’s why Tigress Financial decided to confirm its buy recommendation for the company’s shares, this time raising their valuation to $103 per share. Considering that these ratings were issued as recently as December 2024, the estimated upside potential of 70% from today’s price seems quite reasonable.
More than reasonable, this is justified not only by double-digit growth across the board, but also by what Wall Street expects Uber’s earnings per share (EPS) to be in the coming years. Forecasts call for earnings per share of $3.15 for the next 12 months, with earnings per share looking more like $4.02 in 2026.
This would represent a corresponding growth rate of 162% to 235% from today’s level of just $1.20 per share. This way, investors will be able to make both a qualitative and quantitative case for a double-digit, if not triple-digit, rally in Uber stock in the coming quarters.
With this in mind, there is a reason why markets are willing to pay a premium to book-to-book (P/B) multiple for the stock relative to the rest of the computer sector. Today’s valuation of 10.4x represents a significant premium compared to the computer sector average of 8.3x.
Some will call it expensive, but others will understand that the market always pays a premium for companies that it expects to outperform the competition, and now investors have more reasons than ever to justify that premium.
Before you consider Uber Technologies, you should hear this.
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