Stock of the week - Uber Technologies Inc
12.09.2023
Uber’s years of losses are finally over: The company announced its first-ever operating profit in the second quarter of 2023.
Uber Technologies, Inc. is a technology platform that develops and manages technology products, networks, and apps that facilitate travel from point A to point B. Oscar Salazar Gaitan, Travis Kalanick, and Garrett Camp launched the business in 2009; its main office is in San Francisco, California (1).
On Thursday 31.08.2023, Uber launched an electric motorcycle service in Kenya, its first in Africa, as part of its goal to have an emission-free worldwide platform by 2040. A month prior to that, the president of Kenya, William Ruto, stated that he wanted to see more than 200 000 electric motorcycles in use by the end of 2024, up from the current 2 000. This opens a whole new market. The reason why Kenya as a host country is that they produce over 90% of its electricity from renewable sources. Also, it is establishing itself as a focal point for Africa's shift to environmentally friendly transportation (2).
Furthermore, according to reports, Uber Technologies Inc. is in the early stages of developing a new business internally referred to as "Chore" that is similar to TaskRabbit and gives app users the option to employ people for jobs other than driving and deliveries. Users will have the option to hire a "tasker".
“Chore” was not publicly announced. Nonetheless, it was discovered by an external developer Steve Moser, while he was looking into the code of the mobile application. He then shared the news with Bloomberg News, who then spread it to the broad audience. However, the company's response tempered the spellings: There is no assurance they will eventually offer this service or give a timetable for its future release as "Chore" development is currently in its early phases (3).
The second quarter of 2023 marks a historical moment for the company as it posted its first-ever profit ending the series of losses over the past years. For their second quarter, Uber’s revenues were 9.23 billion $ which is an increase of 14.33% compared to the previous year results. The gross profit was 3.05 billion $ which again is an increase of 32.48% on a year-to-year basis (4).
This is how the bank analysts currently assess Uber Technologies, Inc. (5):
The consensus of the bank analysts is "Buy". Out of 47 analysts covering the share, 44 recommend "Buy" and 3 "Hold". No analyst recommends selling the stock.
The average expected upside of Uber Technologies, Inc. stock price for the next six to twelve months is currently 21.8% (closing price on 12/09/2023).
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