CHINA – 2021/04/13: In this photo illustration, the American online ridesharing and transportation … [+]
Uber stock (NYSE: UBER) rose by about 4% over the last week (five trading days), compared to the S&P 500 which has gained just about 1% over the same period. The stock is also up by about 16% year-to-date, compared to the S&P 500 which is up by about 10%. So what’s driving the gains? With vaccination rates improving and Covid-19 cases off their highs, Uber’s business is starting to look up. On Monday, Uber indicated that it saw record gross bookings in the month of March, with its ride-hailing business posting its best month since the first set of Covid-19 related lockdowns in March 2020, with bookings standing at an annualized $30 billion. The annualized run rate of booking for the food delivery business also stood at a record-high $52 billion. So is Uber stock poised to rise further or is a correction looking imminent? Based on our machine learning engine, which analyzes Uber’s stock price movements post its 2019 IPO, the stock has a 60% chance of a rise over the next month, after rising by about 4% over the last five trading days. See our analysis on Uber Stock Chances Of Rise for more details.
So is Uber stock a buy for the longer term? Investors see Uber stock as a Covid-19 recovery play, with the company’s revenues projected to grow by about 45% this year and by about 36% next year, per consensus estimates. However, the stock now trades at near its all-time highs of about $60 per share. This translates into a valuation of about 6.8x projected 2021 revenue – a high multiple compared to historical levels. For perspective, the stock traded at just over 4x revenues at the end of 2019. This could indicate that much the potential recovery is already priced in for Uber stock at current levels.
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