Uber: Neutral Outlook For Taxi Disruptor As Challenges Remain
Geoff Considine, Ph.D | Oct 06, 2021 13:31
Uber (NYSE:UBER) is a principal player in disrupting the taxi industry. While customers rapidly adopted Uber and other ride hailing services, the large implications of replacing taxis with gig-based transportation are showing the downsides of this trend. Passengers face previous analysis , the market-implied outlook to January 2022 was bearish. The updated outlook using Jan. 21, 2022 options remains bearish and the longer outlook is mid-2022 is also bearish.
Summary/h2
Uber has had to deal with challenging market conditions since early 2020, when COVID-19 hobbled the economy. Figuring out how to balance customer needs with effective pay and incentives for drivers will be key to the firm’s progress towards profitability. The Wall Street analysts have been steadfastly bullish on UBER. The consensus 12-month price target is around 48% above the current share price.
The market-implied outlook, reflecting the consensus view of buyers and sellers of options, continues to be bearish, however, with high expected volatility. The Wall Street consensus and the market-implied outlook have changed little in recent months, even as the share price has risen 19% on management commentary. In light of the substantial disagreement between the analysts and the options market, I am maintaining a neutral rating on the stock.
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