Uber started at neutral with price target below IPO price at Susquehanna; stock edges up
Shares of Uber Technologies Inc. tacked on 0.8% in premarket trade Tuesday, after Susquehanna analyst Shyam Patil said the ride-hailing service was a "once in a generation" company, but said slowing growth created uncertainty around the future trajectory. Patil started coverage of Uber with a neutral rating and a stock price target of $42, which is 6.7% below the initial public offering price of $45. "Given the large growth opportunity for Uber, it's concerning to see growth decelerate meaningfully over the past several quarters," Patil wrote in a note to clients. "Law of large numbers have certainly impacted growth (as well as aggressive incentives and marketing for adjusted revenue growth), but we're still surprised by the recent trends given the sheer size of the addressable market." He said the current valuation appears to capture much of the near- to intermediate-term upside potential. The stock, which went public on May 10, has yet to trade above its $45 IPO price. It has lost 0.8% this week, while shares of rival Lyft Inc. have gained 1.6% and the S&P 500 has slipped 0.7%.
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