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 saw its Momentum Indicator move above the 0 level on March 04, 2024. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 81 similar instances where the indicator turned positive. In of the 81 cases, the stock moved higher in the following days. The odds of a move higher are at .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where UBER advanced for three days, in of 287 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 205 cases where UBER Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The RSI Indicator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
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 .
UBER broke above its upper Bollinger Band on February 14, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding 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 SMR rating for this company is (best 1 - 100 worst), indicating 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 PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent 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.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly 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 (15.015) is normal, around the industry mean (28.907). P/E Ratio (93.448) is within average values for comparable stocks, (145.090). Projected Growth (PEG Ratio) (2.274) is also within normal values, averaging (2.860). Dividend Yield (0.000) settles around the average of (0.088) among similar stocks. P/S Ratio (4.562) is also within normal values, averaging (74.759).
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. UBER’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 88, placing this stock worse than average.
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a company which provides a ride hailing services, develops applications for road transportation, navigation, ride sharing, and payment processing solutions.
A.I.dvisor indicates that over the last year, UBER has been loosely correlated with COIN. These tickers have moved in lockstep 60% of the time. This A.I.-generated data suggests there is some statistical probability that if UBER jumps, then COIN could also see price increases.