Uber Technologies Inc. (NYSE: UBER) is quickly becoming a hedge fund favorite choice, with its Q3 earnings report Wednesday projected to be positive. Analysts expect an increase of over 300% in earnings per share year over year when the report is announced. UBER is also projected to post $11 billion in revenue, an 18.4% jump from the year-ago quarter.
The past few months have been great for Uber, with a 2% climb in the last 30 days and a 20% jump in three months. Multiple firms are increasing their price predictions of the stock after its recent performance. UBS bank, for example, recently raised its upcoming stock price target to $114. The consensus EPS estimate for the quarter has been revised 2.4% higher over the last 30 days to the current level.
UBER Businesses See Huge Gains, Boosting Hedge Fund Potential
UBER’s Mobility business has been seeing huge demand. With customer traffic picking up, gross bookings from the unit are likely to have been impressive. Furthermore, the rideshare industry picked up a huge boost after Tesla (TSLA)’s Robotaxi event. Tesla has already returned its Q3 report to wide investor appeal, boosting its stock prices. Therefore, it will be interesting to see how a positive UBER report counters that and impacts its stock.
With UBER’s recent performance, investors are favoring the company for hedge funds to hold for long-term gains. The company has also gotten huge support from its food/parcel delivery services. The UBER Eats service not only provides another way for the company to boost profits, but also provides jobs for thousands of users, both as delivery people and UBER taxi drivers.
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On a year-to-date basis, UBER shares have gained 26.1%, outperforming the industry. The company’s shares have outperformed rival Lyft (LYFT). From a valuation perspective, UBER is trading at a discount compared with the industry based on its price/sales ratio. The company is trading at a forward sales multiple of 3.30 compared with its industry’s 5.87. Uber has engaged in numerous acquisitions, geographic and product diversifications, and innovations. These innovations have made it a hub for hedge investors, bringing huge returns.