On Tuesday, Bernstein SocGen Group maintained its Outperform rating on Uber Technologies Inc . (NYSE:UBER) stock, with a price target of $95.00.
The firm's assessment follows Uber's announcement of a $950 million acquisition, which is expected to add approximately $1.7 billion in Gross Merchandise Volume (GMV) on a trailing twelve-month (TTM) basis.
This acquisition price represents a multiple of 0.55 times Gross Bookings, a premium compared to Delivery Hero (DHER), which trades at an enterprise value to gross bookings ratio of around 0.25 times.
Uber's investment in Delivery Hero is seen as potentially profitable regardless of developments in Taiwan, although it is linked to the recent deal.
The purchased asset is slightly adjusted EBITDA positive, excluding overhead, suggesting the price may appear high but could be justified through anticipated synergies.
Uber predicts the deal will generate roughly $150 million in annualized adjusted EBITDA, including synergies, within one year of the transaction's completion.
The specifics of what is included in the projected EBITDA are not fully disclosed. If the estimate is based solely on synergies, the implied valuation of 6 times adjusted EBITDA seems reasonable.
There is also speculation about whether this figure might be a combined target for profitability in Taiwan after the deal is closed. Questions remain about how smoothly Uber can integrate the new asset and realize the expected synergies, with more information anticipated in the future.
InvestingPro Insights
As Uber Technologies Inc. (NYSE:UBER) continues to make strategic acquisitions, real-time data from InvestingPro can offer additional insights into the company's financial health and market position. With a market capitalization of $136.91 billion and a revenue growth over the last twelve months as of Q1 2024 at 14.01%, Uber demonstrates a strong growth trajectory. Despite a high P/E ratio of 97.58, the company's PEG ratio stands at 0.73, suggesting a potentially favorable outlook when factoring in earnings growth.
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