Uber’s Inclusion in S&P 500 Sparks Excitement for Investors: What Does Uber Stock Prediction Say?
Dec 11, 2023
Uber (UBER), the company known for its ride-hailing and food-delivery services, has recently made headlines with its inclusion in the S&P 500 index. This move, announced on Friday, has sparked interest in Uber stock prediction among investors as they anticipate potential growth opportunities for the company.
This news comes at a time when Uber’s growth and profitability are soaring.
In its recent third quarter of 2023, the company saw a significant increase in ride bookings, with customers spending $17.9 billion on rides – a 31% jump from the previous year. Food delivery, which took over as Uber’s main revenue source during the pandemic, also saw a strong growth rate of 18%, with customers spending $16.1 billion on the Uber Eats platform.
But it’s not just in its core business that Uber is making waves. The company has continued to innovate in the ride-hailing space with the launch of Group Rides in 100 cities globally. This feature allows friends travelling to the same destination to book one ride, even if they are in different locations – making it easier and more convenient for groups to travel together.
Uber has also been expanding its Taxi segment, particularly in New York City, where customers can now book an UberX and have it fulfilled by a yellow cab.
Uber is also preparing for the anticipated rise of autonomous self-driving vehicles. The company has already signed partnerships with developers of this technology, including Alphabet‘s Waymo, which offers autonomous rides through Uber in Phoenix, Arizona. With over 142 million monthly active customers on its platforms, Uber is poised to be the go-to network for developers of autonomous vehicles, providing them access to a vast audience.
But what may have been the biggest catalyst for Uber’s inclusion in the S&P 500 is its recent profitability. After consistently losing money since its founding in 2009, Uber finally achieved a net income of $595 million in the fourth quarter of 2022 and continued this momentum with an additional $458 million in net income in the first nine months of 2023. This is largely due to the resurgence of its mobility business, careful cost management, and a positive change in the value of its investments.
So, what will Uber stock prediction be?
Uber’s entry in the S&P 500 is a major achievement since strict criteria are required for admission:
- The market capitalisation of at least $14.5 billion.
- Positive earnings over the past four quarters.
- Positive earnings in the most recent quarter.
- At least 50% of shares are available for public trading.
- A minimum of 250,000 shares were traded in the last six months.
S&P 500 inclusion has already had a positive impact on Uber’s stock price, with a 2.4% jump since the announcement. This is because every index fund that tracks the S&P 500 will now have to acquire Uber stock, potentially driving up demand for the company’s shares.
However, analysts are quick to note that there is no guarantee this inclusion will lead to a higher valuation in the long term. Instead, investors should focus on Uber’s potential as a business and keep an eye on its advancements in autonomous technology – which could be a major value creator in the future.