Investing.com — Mizuho analysts maintained an Outperform rating for Uber (NYSE:) with a price target of $90 per share in a note Friday, citing strong fundamentals, attractive valuation, and strategic growth investments.
Despite near-term challenges, they view Uber’s long-term prospects as robust.
The analysts highlight Uber’s commitment to growth, particularly in Mobility and Delivery.
“Concerns about Mobility’s growth appear overstated,” they write, projecting FY25 gross bookings (GB) growth at 19% year-over-year.
While market expansion into lower average selling price (ASP) regions like India and Brazil may moderate growth rates, these are “strategic investments for long-term growth,” says Mizuho (NYSE:).
Delivery remains another bright spot, according to the firm’s analysis.
They expect mid-teen GB growth in FY25, driven by strength in new verticals like grocery and retail.
“Our checks show order frequency is at another all-time high,” they note, with 16% of delivery users now leveraging grocery and retail services. Advertising monetization is expected to cushion margins, offsetting supply and membership incentives.
Uber is said to be on track to meet its Analyst Day targets, with EBITDA projected to grow at a compound annual growth rate (CAGR) of 40%, reaching $11.5 billion by FY26. Analysts also predict free cash flow (FCF) will hit $5 per share by FY26, supported by a 90% EBITDA-to-FCF conversion rate.
Despite the strong outlook, Mizuho acknowledges challenges, including the “robotaxi overhang,” which could keep valuation multiples range-bound in the near term. However, they maintain that Uber’s stock is undervalued at 13x FY26 EBITDA, a discount compared to peers.
“We expect fundamentals remain sound, but multiples could be range-bound near-term,” Mizuho concludes.
