Uber (UBER) may still live up to its IPO hype - here's why
Two days after going public, shares of Uber Technologies Inc. fell nearly 18% and the future didn’t look bright. Rival Lyft (LYFT) had a similar fate after its public offering in March.
On the surface, it may not be as dismal as it appears, as both Uber and Lyft have been gaining popularity among riders. But steep bottom-line losses and a lack of clarity about the both the companies’ future paths to profitability are discouraging investors. However, there are reasons that Uber’s IPO may eventually bounce back.
First, Uber’s shares have plunged not just 17.6% since its IPO, but proposals reveal that Uber is worth as much as $120 billion, and documentation sent to holders of Uber's convertible notes fixed its value between $90 billion and $100 billion. So, investors may say that Uber has shed nearly 18% of its value, but it’s more likely that it has shed 43% below peak Uber.
Secondly, Uber is more than just ride hailing platform. Unlike Lyft, it has a growing overseas presence. While ridesharing accounts for $9.2 billion out of $11.3 billion of Uber’s revenue in 2018, while the rest came from a wide range of offerings that go beyond hailing rides. Takeout orders and other merchandise need rides like Uber Eats, Uber Freight and vehicle financing are all part of the basket.
And finally, underwriters usually wait 25 days following an IPO before initiating coverage. There are 28 firms listed on Uber, helping it sell more than $8 billion in shares last week. Uber debuted when the market for all stocks was generally low. If the climate improves, analysts’ bullish surge could help Uber get back above the splash line.
UBER's RSI Oscillator ascends from oversold territory
The RSI Indicator for UBER moved out of oversold territory on April 09, 2025. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 16 similar instances when the indicator left oversold territory. In of the 16 cases the stock moved higher. This puts the odds of a move higher at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on April 17, 2025. You may want to consider a long position or call options on UBER as a result. In of 84 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for UBER just turned positive on April 14, 2025. Looking at past instances where UBER's MACD turned positive, the stock continued to rise in of 40 cases over the following month. The odds of a continued upward trend are .
UBER moved above its 50-day moving average on April 24, 2025 date and that indicates a change from a downward trend to an upward trend.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where UBER advanced for three days, in of 304 cases, the price rose further within the following month. The odds of a continued upward trend are .
UBER may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 8 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The 10-day moving average for UBER crossed bearishly below the 50-day moving average on April 04, 2025. This indicates that the trend has shifted lower and could be considered a sell signal. In of 16 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where UBER declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for UBER entered a downward trend on March 24, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 87, placing this stock better than average.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. UBER’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (14.144) is normal, around the industry mean (30.787). P/E Ratio (87.816) is within average values for comparable stocks, (160.020). Projected Growth (PEG Ratio) (2.162) is also within normal values, averaging (2.707). Dividend Yield (0.000) settles around the average of (0.032) among similar stocks. P/S Ratio (4.286) is also within normal values, averaging (59.678).
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
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General Information
a company which provides a ride hailing services, develops applications for road transportation, navigation, ride sharing, and payment processing solutions.
Industry PackagedSoftware