Trading Uber on Ride-Share Bookings Growth
Shares in ride-hailing company Uber are down more than 50% from its record high price of ~$63.00 recorded in February 2021.
With post-pandemic lockdowns easing and social conditions returning back to normal, Uber’s recent numbers are now starting to paint an interesting picture.
Learn how to trade Uber shares below.
|Stock:||Uber Technologies Inc|
|Symbol for Invest.MT5 Account:||UBER|
|Date of Idea:||11 Oct 2022|
|Time Line:||1 - 6 months|
|Position Size for Invest.MT5 Account:||Max 5%|
- The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.
All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing.
Uber Posts Impressive Ride-Share Bookings Growth
According to analysts at Morgan Stanley, Uber’s stock price could double as the company’s recent changes in cost structure can help to boost growth. The analysts cite Uber’s note that growth in Uber X and new regions would drive forward ride-share bookings growth by 50% and 15% respectively.
Interestingly, the top 10% of Uber users drive nearly half of the total amount of global bookings. Therefore, Uber’s management team have focused on newer products that can help to drive revenue from the other 90% of its users. This includes different types of Uber products such as sharing rides with other users, offering mobility to those with pets and so on.
Another product that could also help to drive Uber’s growth is its food delivery business. In the second quarter of the year, Uber’s delivery business such as Uber Eats had more gross bookings than its ride-hailing business. This division achieved 7% year-on-year growth.
In the past, Uber had struggled to find enough drivers to meet demand – especially during the pandemic. However, the company announced it has seen a huge acceleration in active and new drivers. This can help to achieve lower wait times for users which is likely to help with customer satisfaction.
Uber’s CEO Dara Khosrowshahi, stated that 72% of its drivers in the US said that one of their considerations in signing up to become an Uber driver was due to inflation and life getting more expensive. With inflation due to stay elevated for some time, this could lead to more drivers.
Some of the positive data points are being reflected in the company’s past revenue figures which have been growing quarterly since the first quarter of 2021. However, there are some major headwinds to take into consideration such as the threat of a recession and a slowdown in consumer spending which could affect revenue, earnings and the overall stock price.
Uber Stock Forecast - What do the Analysts Say?
According to analysts polled by TipRanks for an Uber stock forecast in the past 3 months, there are currently 22 buy, 3 hold and 0 sell ratings on the stock. The highest price level for an Uber stock forecast is $75.00 with the lowest price target at $16.00.
The average price target for an Uber stock forecast is $46.25.
An Example Trading Idea for the Uber Stock Price
An example trading idea for the Uber share price could be as follows:
- Buy the stock at $28.00 to allow for current market volatility.
- Target just below the average analyst price target at $46.00.
- Keep your risk small at a maximum of 5% of your total account.
- Time Line = 1 – 6 months
- If you buy 10 Uber shares:
- If target is reached = $180.00 potential profit ($46.00 - $28.00 * 10 shares).
Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering that Uber stock was down nearly 70% this year from its record high.
Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.
With the Admirals Invest.MT5 account you can buy US stocks from $0.02 per share. This means buying 10 shares in Uber would result in a commission of $0.20 ($0.02 * 10 shares).
There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall!
How to Buy Uber Stock in 4 Steps
With Admirals, you can buy shares in companies like Uber with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks.
- Open an account with Admirals to access the Trader’s Room.
- Click on Trade on one of your live or demo accounts to open the web platform.
- Search for your stock at the bottom of the Market Watch window and drag the symbol onto the chart.
- Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level.
Click on the banner below to buy Uber stock today! ▼▼▼
Do You See the Uber Stock Price Moving Differently?
Remember that all analytics and trading ideas are based on the personal view and experience of the author.
If you believe there is a higher chance Uber's share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.
This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article.
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