Uber's IPO Price Range Leaves Little Upside, Susquehanna Says

(Bloomberg) -- Uber Technologies Inc.’s price range of $44 to $50 per share for its initial public offering likely captures much of the near- to intermediate-term upside potential, Susquehanna analyst Shyam Patil writes in a note.

While the analyst calls Uber a ``once-in-a-generation company'' with an opportunity to revolutionize transportation and logistics, he notes that slowing growth creates uncertainty around the ride-sharing firm's future trajectory. ``It’s concerning to see growth decelerate meaningfully over the past several quarters,'' Patil writes, citing bookings growth for the first quarter that slowed to mid-30s percent range, compared with high 50s percent range in the year-ago period.

Patil sees the ``law of large numbers'' impacting growth along with aggressive incentives, but the slowdown still comes as a surprise given the size of the addressable market, he wrote. While the lack of profitability is expected at this point, he believes profitability is achievable as the business continues to scale, with Ebitda likely becoming positive in 2023.

Still, Uber’s financial complexity, its limited disclosures for key metrics on its core businesses and lack of true comparables will likely weigh on valuation, Patil writes.

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