1) Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 130
Uber Technologies, Inc. (NYSE:UBER) is a technology provider, matching riders with drivers, hungry people with restaurants and food delivery service providers and shippers with carriers.
The company’s stock was recently covered by numerous research analysts. DA Davidson initiated the coverage on shares of Uber Technologies, Inc. (NYSE:UBER) and reaffirmed “Buy” rating. The brokerage gave a $81.00 price objective on the company’s shares on 8th May. Piper Sandler increased their price target on Uber Technologies, Inc. (NYSE:UBER) from $86.00 to $88.00, giving the stock “Overweight” rating on 25th June.
The company announced financial results for the quarter ended March 31, 2024. Its gross bookings went up by ~20% YoY to $37.7 billion, or 21% on the constant currency basis. Mobility Gross Bookings came in at $18.7 Bn, reflecting 25% growth YoY or 26% growth on constant currency basis.
Uber Technologies, Inc. (NYSE:UBER) has recently been in the news after reports surfaced that Tesla, Inc. (NASDAQ:TSLA) pushed back its big robotaxi event. Mr. Musk announced that it plans to postpone a planned event from August to October.
Plans for potential autonomous robotaxi service from Tesla, Inc. (NASDAQ:TSLA) have impacted share prices of Uber Technologies, Inc. (NYSE:UBER) and Lyft, Inc. (NASDAQ:LYFT) since April 2024.
At the end of 1Q 2024, 130 hedge funds tracked by Insider Monkey reported having stakes in Uber Technologies, Inc. (NYSE:UBER). These stakes have a consolidated value of ~$10.18 million.
RiverPark Advisors, an investment advisory firm, released its 1Q 2024 investor letter and mentioned about Uber Technologies, Inc. (NYSE:UBER). Here is what the company said:
“Uber Technologies, Inc. (NYSE:UBER): UBER was a top contributor in the quarter following better than expected 4Q23 earnings and 1Q24 guidance. Gross bookings of $37.6 billion were up 22% year over year. Mobility gross bookings of $19.3 billion grew 29% over last year driven by a combination of product innovation and driver availability. Delivery gross bookings of $17 billion were up 19% from last year and continued to be strong throughout the quarter. 4Q Adjusted EBITDA of $1.3 billion, up $618 million year over year, was better than management’s guidance of $1.2 billion, and the company generated $768 million of free cash flow, up from a cash loss of $303 million last year. Management guided to continuing growth in 1Q Gross Bookings (20% growth) and Adjusted EBITDA (of $1.3 billion). The company hosted a well-received analyst day in February during which it guided to three year compounded annual growth rates for gross bookings of mid-to-high single digits and EBITDA of 30-40%, both above investor expectations. The company also guided to free cash flow conversion of 90% of EBITDA.
UBER remains the undisputed global leader in ride sharing, with a greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates. Moreover, after a history of losses, the company is now profitable, delivering expanding margins and substantial free cash flow. We view UBER as more than a ride sharing and food delivery service; we also see it as a global mobility platform with 142 million users (by comparison, Amazon Prime has 200 million members) and the ability to penetrate new markets of on-demand services, such as package and grocery delivery, travel, and hourly worker staffing. Given its $5.4 billion of unrestricted cash and $4.8 billion of investments, the company today has an enterprise value of $165 billion, indicating that UBER trades at 21x our estimates of next year’s free cash flow.”
While we acknowledge the potential of Uber Technologies, Inc. (NYSE:UBER) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
