Uber Faces Price Target Cuts Amid Mixed Q4 Earnings Results
Shares of Uber Technologies Inc. (UBER) saw a wave of price target reductions on Thursday following the company’s fourth-quarter earnings report, which revealed a 20% YoY revenue growth to $11.96 billion, surpassing Wall Street expectations of $11.78 billion. However, despite the strong growth, the company’s net income showed a massive 382% YoY increase, driven largely by non-operational factors, such as a $6.4 billion tax benefit and $556 million in unrealized gains from equity revaluation. Earnings per share (EPS) for the quarter came in at $3.21, significantly higher than the consensus estimate of $0.48.
Price Target Reductions Reflect Market Caution
Following the earnings report, several analysts trimmed their price targets for Uber, with Citi lowering its target to $92 from $98, while maintaining a Buy rating. The firm cited autonomous vehicles (AV) as a key discussion point, acknowledging Uber’s strong position to potentially become a core player in autonomous vehicle networks over time, given its size, scale, and operational experience.
JPMorgan also adjusted its price target to $90, down from $95, although it maintained an Overweight rating on the stock. Despite Uber’s strong bookings growth, JPMorgan noted that EBITDA growth was more in line with expectations rather than outperforming, reflecting lower Mobility EBITDA margins. The brokerage hinted that they would consider buying the stock during any potential pullbacks but cited valuation concerns due to the lower multiple assigned to Uber.
Meanwhile, Piper Sandler and Wells Fargo followed suit, adjusting their price targets to $80 and $87, respectively, while maintaining Overweight ratings. Both firms emphasized that the autonomous vehicle strategy and the potential competition in the AV space continue to weigh on Uber’s outlook.
Retail Sentiment Remains Bullish
Despite the analyst downgrades, retail sentiment for Uber remains strong. As of February 6, 2025, Stocktwits sentiment for Uber was in the ‘extremely bullish’ range (83/100), reflecting optimism about Uber’s prospects in the near term. Retail investors have expressed confidence in the stock, particularly due to Uber’s impressive revenue growth and its potential role in autonomous vehicle technology.
Outlook for 2025 and Beyond
Looking forward to Q1 2025, Uber provided a gross bookings forecast between $42.0 billion and $43.5 billion, slightly below the Wall Street consensus of $43.51 billion, with a 5.5 percentage point currency headwind factored in.
Despite the market’s mixed response to Uber’s Q4 earnings, the stock has gained over 2% in 2025, although it remains down over 8% from the previous year. The company’s future largely hinges on its ability to navigate competition, particularly in the emerging autonomous vehicle sector, and manage its operational margins effectively.
