Uber Analyst Says First Report Is ‘Feather in the Cap’ for Bulls

(Bloomberg) -- Uber Technologies Inc. rallied on Friday after the ride-hailing company reported first-quarter results that helped ease fears following a rocky first few weeks of trading.

Analysts remain bullish about the company's long-term potential, and the results were seen as helping to justify that optimism. Wedbush wrote that investors needed “a bridge between near-term headwinds” and “the long-term vision working.” Referring to the results, analyst Ygal Arounian wrote, “we think they got that here.”

The stock rose as much as 4.5% to $41.57 in morning trading, though it remains below its debut at $45 earlier this month.

Wedbush, Ygal Arounian

Investors needed “a bridge between near-term headwinds” and “the long-term vision working, and we think they got that here.”

The report addressed many issues that investors had been concerned about, including take rates and losses. This was a “big first step” for the company, and suggests 2019 will be “stronger than feared.”

The results and management commentary are “a much needed feather in the cap for the bulls and should help Uber start to slowly get out of the investor penalty box.”

Outperform rating, $65 price target.

Susquehanna Financial Group, Shyam Patil

The lack of an outlook was “surprising and adds to transparency issues.”

Uber is a “once in a generation company with an opportunity to revolutionize transportation and logistics,” but “business complexity, lack of visibility into forward numbers, and a precarious competitive landscape are likely to keep shares range bound.”

Neutral rating, $42 price target.

Loup Ventures, Gene Munster

Expects the Uber story will become more attractive in a year.

What Bloomberg Intelligence Says:

“Take rates should improve through 2019 as the company curtails subsidies and rolls out a loyalty program for riders in its core ride-sharing business.”

-- Analyst Mandeep Singh

Click here for the research.

To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Jennifer Bissell-Linsk, Morwenna Coniam

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