With Uber (NYSE:UBER) stock down about 15% since the year-to-date high printed in February, analysts see a buying opportunity as fundamentals continue to improve.
Moreover, Uber shares fell in Friday after-market hours trade after Lyft (NASDAQ:LYFT) said it will make “significant” job cuts.
Bernstein analysts believe the selloff is overdone and that the broker is a buyer of the stock on weakness.
“We view LYFT's actions as the company playing catch up to UBER on pricing and ride times vs. a spiraling of competitive dynamics,” they wrote in a note.
Wolfe Research analysts also weighed in as they previewed the Q1 earnings report for the ride-sharing company. Uber is set to report on May 02 before the market open.
“We expect another quarter with bookings in-line and EBITDA above prior guidance. On outlook, 2Q EBITDA range should reflect healthy incremental margins at EATS (from Int’l) and sustained growth in ads, and come in around current consensus estimate of $755m (incremental margins of ~10%). Overall, we expect another healthy print from UBER,” they said.
The analysts also continue to prefer Uber to Lyft as the former “has a superior consumer value prop and operating model that should help the company sustain share and deliver margin expansion in rational market environment LT.”
Uber stock is up 0.5% Monday.