Should I buy Uber shares in February 2022?

Uber Technologies, Inc. (NYSE: UBER) will announce fourth-quarter earnings results this Wednesday, February 09, after the market closes.

Uber shares have weakened more than 10% since the beginning of 2022 year, and the current price stands at $37.82.

Outlook remains positive

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Uber will announce fourth-quarter earnings results this week, and the mobility segment is likely to have benefited from improved ride volumes.

Uber should deliver a year-over-year increase in earnings on higher revenues while its management expects adjusted EBITDA to be between $25 million and $75 million for the fourth quarter.

The consensus earnings per share estimate stand at -$0.33 (+38.9% Y/Y), while the consensus revenue estimate is $5.36 billion (+69.4% Y/Y).

The stock might move higher if the fourth-quarter results top expectations, but management’s discussion of business conditions and future earnings expectations will also have an important influence on the stock price.

The company’s business has proven improvements throughout the third fiscal quarter, and Uber reported solid results in November. Total revenue has increased by 72.6% Y/Y to $4.85 billion, while the GAAP EPS was -$1.28 (misses by $0.98).

Gross bookings reached an all-time high of $23.1B in the third quarter, representing an increase of 57% Y/Y, and Uber announced that it expects gross bookings of $25 billion to $26 billion in the fourth quarter.

UBS recently reported that the Uber stock could more than double from current levels as improving bookings and profitability from Mobility should support investor confidence in the long-term.

According to UBS, gross margins are better now than they were prior to the pandemic, with the expectations of 31.4% in 2022 and 34.9% in 2023.

UBS assigned a buy rating on Uber shares with an $80 target price which implies more than 100% upside potential. Lloyd Walmsley, an analyst from UBS, said:

At current levels, Uber Technologies shares don’t appreciate the company’s mobility and delivery businesses, adding that there is evidence it is taking market share in mobility away from competitors, such as Lyft.

Uber is still not profitable on a fiscal year basis, but this could change soon, and shares of this company represent solid long-term investment at the current price.

Technical analysis

Uber shares weakened more than 10% since the beginning of the 2022 year, but if the company posts strong fourth-quarter earnings results, the share price could be above the current levels.

If the price jumps above $40, it will signal to trade Uber shares, and the next target could be $45.

If the price falls in the upcoming period, every price in a range from $25 to $30 could be a very good opportunity to invest in Uber stock.

Summary

Uber will announce fourth-quarter earnings results this Wednesday, and if the company posts strong fourth-quarter earnings results, the share price could be above the current levels. UBS assigned a buy rating on Uber shares with an $80 target price which implies more than 100% upside potential.

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