Shares of Ride-hailing giant Uber Technologies (UBER) took a hit today due to disappointing guidance for FY25 and an increase in currency risk. Despite this, five-star Wedbush analyst Scott Devitt believes that the recent decline is unwarranted, thanks to the company’s strong fundamentals, solid growth, and margin expansion. Devitt noted that Wall Street’s expectations had been rising, which may have contributed to the disappointing reaction. However, Uber is also making progress in expanding its autonomous vehicle (AV) capabilities.
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Indeed, CEO Dara Khosrowshahi confirmed that the company is committed to AV and its role as a go-to-market partner for AV players. As a result, Uber has partnered with Alphabet’s Waymo (GOOGL) to launch an autonomous ride-hailing service in Austin where riders will be able to order a Waymo driverless taxi directly from the Uber app. Analysts believe that Uber’s strategic partnerships and scalable platform position it for success in the future of autonomous ride-hailing.
Furthermore, Khosrowshahi emphasized on the earnings call that although revenues may be impacted by currency fluctuations, its profits are insulated since drivers and merchants are paid in local currencies. This natural hedge helps protect the company’s profit margins from currency headwinds.
Is UBER a Buy or Sell Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on UBER stock based on 27 Buys, two Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 9% decline in its share price over the past year, the average UBER price target of $92 per share implies 44.3% upside potential.
