- Wednesday, October 16, 2024
Shares of Uber Technologies Inc. experienced an impressive 150% surge last year, causing some analysts, such as Nikhil Devnani from Bernstein, to describe the stock chart as "scary." However, Devnani suggests that one's perspective on Uber's positioning depends on how far into the future they are willing to look. According to him, the setup for Uber's upcoming earnings report and investor event is not compelling, with expectations continuing to rise.
Devnani raises concerns about investor events, stating that crowded stocks with positive momentum tend to make him nervous. He notes that Uber's new chief financial officer might set conservative but achievable targets, while Wall Street may be expecting more due to the significant increase in the stock price.
Nevertheless, when taking a longer-term view, Devnani finds the case for Uber's stock to be more attractive. He highlights that the fundamentals of the company are solid and that it has started generating substantial cash flow. Additionally, management has consistently outperformed expectations, and Uber's market leadership position appears to be more solidified than ever.
Devnani mentions that Uber has the potential for substantial buybacks and notes that investors will gain insight into the company's plans in this regard when it releases its financial results.
Drawing lessons from successful companies like Meta Platforms Inc. and Amazon, Devnani emphasizes the importance of owning category winners in the internet space and allowing their growth to compound. He rates Uber's stock as "outperform," with a target price of $70, which closely aligns with the current price.
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