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Investors Load Up On Ubers Fallen Stock

Posted on March 14th, 2022

Uber Technologies Inc. (UBER) has underperformed the S&P 500 as of March 2022, falling almost 10% compared to the S&P’s gain of about 33.4% over the past 2-years. Additionally, the company slid on the WhaleWisdom Heatmap to a ranking of twenty-nine from twenty-one. However, hedge funds were bullish on the stock, increasing their positions in the fourth quarter for this behemoth ride-sharing company.

Uber is an American-based technology company with global operations. The company develops and supports the technology that enables ride-hailing, ride-sharing, food delivery, and package delivery services. Its focus on mobility services goes beyond just matching consumers looking for rides with independent providers of those services; Uber also connects consumers with electric bicycle rental options and partners with many communities to leverage Uber’s technology to improve public transit. Due to reduced consumer travel, demand for Uber’s ride services has fluctuated throughout the coronavirus pandemic. However, Uber’s diversification of services has allowed other aspects of the business, such as Uber Eats and Uber Connect, to gain popularity and flourish.

Adding to Holdings

Uber is a leader in mobility services, and hedge funds and institutions actively bought the stock. In the fourth quarter, the aggregate 13F shares held by hedge funds increased to about 576.8 million from 529.5 million, an increase of approximately 8.9%. Of the hedge funds, 69 created new positions, 124 added an existing one, 43 exited, and 86 reduced their stakes. Institutions were also buying and, overall, increased their aggregate holdings by about 3.0% to approximately 1.43 billion from 1.39 billion. The 13F metrics through January of 2022 show that funds have held steadier than stock prices.

(WhaleWisdom)

(WhaleWisdom)

Encouraging Revenue Estimates

Analysts expect to see an initial decline in earnings for 2022 but also anticipate a slight rebound by December 2023, with earnings per share predicted at $0.01. Year-over-year estimated increases could bring growth to approximately 33.7 billion in revenue by late 2023, up from anticipated revenue of 27.4 billion for December 2022. 

(WhaleWisdom)

Favorable Ratings

There appears to be optimism among analysts following the stock’s rise on March 11, 2022. Analyst Benjamin Black of Deutsch Bank gave the stock a Buy rating and set a price target of $50, noting Uber’s “global market leadership.” Loop Capital analyst Rob Sanderson lowered the firm’s price target on Uber to $55 from $70 and maintained a Buy rating due to expectations that the mobility as a service provider will continue to rise in value over the next year. Uber has an advantage compared to many of its competitors due to its strategic offering of multiple services. 

Positive Outlook

Uber may have weathered a challenging year in 2021, but the technology company and maverick of mobility solutions is showing promise in 2022. Hedge funds and institutions were buying, and revenue estimates through 2023 look favorable. Uber seems well-positioned to adapt to changes in consumer demand for its various services, and its lower share value compared to 2021 may be appealing to investors for its long-term potential. 

This entry was posted on Monday, March 14th, 2022 at 9:24 am and is filed under Stock. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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