Uber Technologies (NYSE:UBER) shares surged nearly 8% today after the ride-hailing giant announced a share buyback program of up to $7 billion. Importantly, this is the first-ever stock buyback program from Uber.
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Prashanth Mahendra-Rajah, the CFO of the company, noted that the buyback is “a vote of confidence in the company’s strong financial momentum.” The CFO also stated, “We will be thoughtful as it relates to the pace of our buyback, beginning with actions that partially offset stock-based compensation, and working towards a consistent reduction in share count.” Further details from the company on its strategy and capital allocation plans are awaited at its virtual investor update today.
In another development, drivers and riders with Uber, Lyft (NASDAQ:LYFT), and Deliveroo are striking in the U.S. and UK over fair wages and working conditions.
Uber’s share price has skyrocketed by nearly 106% over the past year. Last week, the company delivered a better-than-expected set of numbers for the fourth quarter, with its earnings more than doubling over the prior year to $0.66 per share.
Is Uber a Good Buy Right Now?
Overall, the Street has a Strong Buy consensus rating on Uber, and the average UBER price target of $78.65 points to a 14% potential upside in the stock.
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