Uber Drops to Record Low as ‘Frustrations’ Persist Over Outlook
(Bloomberg) -- Uber Technologies Inc. shares, which have spent more time below their recent IPO price than above it, fell to a record low Wednesday, as market sentiment broadly soured on fears of a global slowdown and amid lingering disappointment with last week’s second-quarter report, according to analysts.
The stock dropped as much as 6.5% to $34.10, the lowest price since its May debut, as major averages slumped 2%. Uber has lost 24% of its value since it began trading, with much of that slide occurring in the week since its earnings, which came on the heels of a better-than-expected report from ride-hailing competitor Lyft Inc. Uber, by contrast, missed revenue expectations and posted a $5.24 billion net loss, its biggest ever.
“Frustrations with limited details surrounding forward-looking guidance and questions on how currencies pressure top and bottom line in the future” are also weighing on the stock, Cross Research analyst Steven Fox said in an email. He has a hold rating on Uber.
Still, analysts remain broadly bullish on the company’s prospects. At current levels, Uber is trading about $17 below the $52 average price target from analysts surveyed by Bloomberg, suggesting it could climb 50% in the next year. For Lyft, which fell 5.3% Wednesday, analysts see a potential gain of 34% in the next year, according to data compiled by Bloomberg.
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