Shares of Uber Technologies (UBER -1.88%) dipped following its first-quarter earnings results. The company continued to show solid top- and bottom-line growth, but Jefferies analyst John Colantuoni attributed the stock's fall to a rare miss in mobility bookings.
Uber's mobility bookings grew 26% year over year in the quarter, which was below expectations. However, Uber said this included a one-point headwind from de-consolidating the non-ridesharing portion of the Careem business last year. But other key performance metrics looked solid, most notably continued improvement on the bottom line.
The analyst maintained a "buy" rating on the shares but lowered the price target from $103 to $100, likely to keep the stock's projected upside in line with the recent sell-off. With the shares currently trading at $67, Jefferies is expecting plenty of upside for investors.
Is the stock headed to $100?
The number of customers who completed a mobility ride or received a delivery order grew 15% year over year to 149 million in the first quarter.
The demand for Uber rides continues to grow at a good clip, but what most impresses Wall Street analysts is the company's margin expansion. Uber's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew 82% over the year-ago quarter to nearly $1.4 billion. This is an important signal of where the stock might be headed over the next few years.
The combination of double-digit growth in gross bookings, revenue, and adjusted EBITDA sets the stage for the share price to hit the analyst's price target within the next 18 months or so.
Uber trades at an enterprise value-to-EBITDA multiple of 23, based on Wall Street's adjusted EBITDA estimate for 2024. With analysts projecting adjusted EBITDA to reach $10.9 billion in 2026, the stock could climb over 70% from current share prices, assuming it still trades at the same EBITDA multiple.
