Is Uber Stock Too Cheap To Ignore?

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uber stock (NYSE:UBER) is down about 42% in year-over-year trading near $25 per share, down about 14% over the same period, outperforming the broader S&P 500. There are many factors that weaken the company. First, inflation is on the rise because the labor market is also tight, making it difficult for Uber.Uber
To manage the supply of drivers who are also struggling with rising gas prices. This has raised Uber’s average fares, which, in turn, is affecting the number of users using the platform and the number of trips the company offers. For perspective, over Q1, Uber’s monthly active platform customer base fell to 115 million, from 118 million in Q4 2021. Investors are also reducing allocations to high-growth and loss-making companies, as interest rates tend to be higher and this has also hurt Uber, which remains in the red. Separately, with US GDP contracting in the first quarter of 2022, there are concerns the economy could slide into recession, which could, in turn, hurt demand for Uber’s ride-hailing, delivery and logistics services, heavy for the macroeconomics. action.

That being said, there have been a number of really positive developments for the company that could make the stock a buy. Despite the stock’s correction, Uber’s underlying growth has been strong. Uber Revenue Over Q1 grew 136% year-over-year to $6.9 billion, beating estimates. Consensus estimates point to revenue of about $30 billion for this year, an increase of about 70% versus 2021 and more than double the revenue the company posted before Covid-19, as ride-hailing The business grows, while the food delivery business that boomed through Covid has largely sustained. The underlying economics of Uber’s business is also improving despite inflationary constraints. Barring a few expenses like stock-based compensation and writeoffs, Uber was profitable in Q1. Uber’s free cash flow also reached break-even levels in the quarter, and the company now expects to generate meaningful free cash flow for the full year 2022. Adjusted EBITDA margin was 5.8% of gross bookings in Q1, which is higher than ever. Up to 4.4% in Q1 2021. Uber’s advertising business could also provide margin growth in the long run, given the company’s massive user base of around 115 million. Uber projects advertised sales of $1 billion by 2024.

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Now, despite strong growth and improving margin trends, Uber stock trades at 1.6x Consensus 2022 revenue, well below its delivery rival. doordash stock, which trades at approximately 4x projected 2022 revenue. We value Uber stock at around $35 per share, which is a 50% premium to its current market price. View our analysis Uber Valuation:expensive or cheap for more information.

With stock prices falling sharply across sectors, we are headed for a bear market for the first time since March 2020, when the COVID-19 outbreak triggered a market crash. We capture key trends in the Dow during and after major market crashes in our interactive dashboard analysis.market crash comparison,

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