Uber Stock Gaining Speed: Analysts See 30% Upside
Uber Technologies Inc. (NYSE: UBER) shares have demonstrated solid resilience in recent weeks as they continue gaining momentum after a choppy 2024. While the stock is still some way off last October's all-time high, there are several reasons investors should be getting excited about its prospects heading into the rest of the year. As we'll see below, some analysts are even calling for a 30% upside.
The bullish outlook is supported by the broader market's signs of strength, with the S&P 500 currently hovering right below its high. There's clearly a risk-on sentiment among investors right now, which makes underperforming stocks like Uber all the more interesting. So, what does that say about where the stock is trading today and how to best play it? Let's jump in and take a closer look.
Uber’s Strong Fundamentals Signal a Promising Start to 2025
For starters, we'll take a look at Uber's recent fundamental performance. The company smashed expectations with its last earnings report of 2024, which also saw its quarterly revenue jump to a record. For the most part, last year's reports topped analyst expectations across the board, which sets Uber up well to build on this now in next week's release.
Indeed, it could well be one of the reasons the stock has been bought up over the past month, as the smart money gets in position for a prospective beat.
Is Uber Undervalued? Analysts Suggest More Upside Ahead
It's also worth noting that several recent analyst updates are exceedingly bullish on Uber's prospects. Take Cantor Fitzgerald, Piper Sandler, and Needham & Company, for example; all three reiterated their Overweight ratings on the stock this week alone, with price targets all the way up to $90 a share. Considering Uber closed out Wednesday's session trading below $67, that's a solid 34% potential upside for investors to be targeting.
These built on the similarly bullish stances taken by Wolfe Research and Goldman Sachs in early January. Indeed, given the overwhelmingly bullish outlook in terms of analyst coverage, it's a wonder the stock hasn't rallied more this year. Shares are up only around 10% since the end of December, and the more bearish investor could argue they're already in a downtrend.
Fierce Competition: Can Uber Maintain Its Market Dominance?
This is worth keeping in mind, as all the bullish analyst ratings in the world count for nothing if investors just aren't buying into it. Uber's lackluster performance could be seen as a bit of a red flag, especially after the strong earnings report it delivered in Q4.
There's also the fact that this month has seen at least one downgrade on the stock, with Citizens Jmp moving Uber down from a Strong Buy rating to a Hold. It's also important to acknowledge that Uber faces several headwinds on the horizon. Competition remains fierce in the ride-hailing and delivery sectors, with the likes of Waymo heating things up with their robotaxis.
However, these risks seem to be priced into the stock at current levels, and the potential rewards may outweigh the risks for long-term investors. A strong performance in next week's earnings report should clear the way for a solid rally over the coming months.
Is Uber One of the Best Stocks to Watch Heading Into Earnings?
Technically, Uber's chart also supports the bull's thesis, given that the stock rally since the start of January has undone much of December's slide. That being said, the stock has been consolidating its gains in recent sessions and will need to push on through into February or could risk losing momentum.
Overall, the technical situation, combined with the positive fundamental developments and favorable analyst ratings, make a compelling case for Uber's near-term potential. It's a stock that's worth watching closely ahead of its earnings report, with a solid rally on the cards should they deliver another resounding beat.
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