Uber Technologies Inc (NYSE:UBER) is the “top pick” of Oppenheimer analysts ahead the company’s second-quarter earnings call on August 1.
The firm pointed to the size and scope of Uber’s user base, known as a network effect, as a major driver.
“The company continues to benefit from network effects as a ‘super app,’” analysts wrote. “[Along with] elevated spending on services/travel/entertainment, and return-to-work tailwinds.”
Third-party data suggests that consumers are spending more time on Uber (up 5% year-over-year) than on Doordash (down 7%) and Lyft (down 5%), the firm noted.
Additionally, while the company’s share of new drivers is up 250 basis points from the first quarter, driver supply remains at 92% of its March 2020 level, indicating potential upside in the second half of the year.
“[There are] multiple catalysts powering growth,” analysts wrote. “[Uber is] positively exposed to shift of consumer spending to services/travel/entertainment from goods. For example, FY23 airlines/hotels revenues forecasted to grow 15%/14%, respectively.”
Oppenheimer has a $65 price target for Uber. On Friday afternoon, its shares traded 3.1% higher at $48.04.
The ride-sharing giant is expected to report second-quarter revenue of $9.33 billion and a loss of $0.01 per share on August 1.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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