Is Uber Stock Driving in the Right Direction?

UBER is down 42% in 2022

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Uber Technologies, Inc. (NYSE:UBER) fell to a two-year low roughly a month ago after a lackluster earnings report. With earnings out of the way and the summer months here, is there any hope for the ride-sharing app?

Uber stock has taken a 42% haircut in 2022. Since that aforementioned bottom, the shares have traded in a tight range between $23 and $25. Yet no analysts have come forward to adjust their stance bearishly; 17 of the 19 brokerages covering UBER maintain "buy" or better ratings, with zero "sells" on the books.

Uber stock now provides a decent valuation at a price-sales ratio of 2.09, based on their recent top-line growth rate. The company has managed to grow their trailing 12-month revenues 92% after reporting a 21% decrease for fiscal 2020. UBER is also estimated to end fiscal 2022 with 72% revenue growth and increase revenues by another 21.2% in 2023.

The ridesharing business’s fundamentals offer a high level of risk. UBER currently owes $11.42 billion in total debt and holds $4.18 billion in cash on their balance sheet. Uber Technologies is also expected to experience a large decline in earnings this year. Estimates have their EPS (earnings per share) dropping by $2.19, from -$1.00 to -$3.19 for fiscal 2022. In general, UBER's business model presents too many uncertainties at the moment for Uber stock to be considered a safe long-term investment.

 

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