Is UBER Stock a Buy Post the $1.5B Accelerated Share Buyback Launch?

Zacks01-07

Shares of Uber Technologies UBER gained 2.7% on Jan. 6, closing the trading session at $66.31. The uptick followed a significant move by the company to return value to its shareholders. UBER announced...

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UBER announced...</p>\n\n<a href=\"https://finance.yahoo.com/news/uber-stock-buy-post-1-140800013.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Is UBER Stock a Buy Post the $1.5B Accelerated Share Buyback Launch?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIs UBER Stock a Buy Post the $1.5B Accelerated Share Buyback Launch?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-01-07 22:08 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/uber-stock-buy-post-1-140800013.html><strong>Zacks</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Shares of Uber Technologies UBER gained 2.7% on Jan. 6, closing the trading session at $66.31. The uptick followed a significant move by the company to return value to its shareholders. UBER announced...</p>\n\n<a href=\"https://finance.yahoo.com/news/uber-stock-buy-post-1-140800013.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0323591593.USD","symbol_name":"SCHRODER ISF QEP GLOBAL QUALITY \"A\" (USD) ACC","start_time":0,"source_url":"https://finance.yahoo.com/news/uber-stock-buy-post-1-140800013.html","article_id":"2501786765","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2501786765","pubTimestamp":1736258880,"columns":[],"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Shares of Uber Technologies UBER gained 2.7% on Jan. 6, closing the trading session at $66.31. The uptick followed a significant move by the company to return value to its shareholders. UBER announced that it would start an accelerated $1.5 billion stock buyback program. To this end, the San Francisco, CA-based ride-hailing company entered into an accelerated share repurchase  agreement with Bank of America BAC.Digging the Details of UBER’s Accelerated Share Repurchase Agreement. Under the ASR agreement, Uber will pay $1.5 billion to Bank of America and is likely to receive more than $18.5 million shares. This represents about 80% of shares Uber plans to buy back under the accelerated plan. The entire transaction is likely to be wrapped up by the end of the first quarter of 2025.With this bold initiative, UBER is not only enhancing shareholder value but also signaling confidence in its ongoing business strategy. CFO Prashanth Mahendra-Rajah termed the $1.5 billion accelerated share buy","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0323591593.USD":"SCHRODER ISF QEP GLOBAL QUALITY \"A\" (USD) ACC","LU0477156953.USD":"HARRIS ASSOCIATES US VALUE EQUITY \"RE\" (USD) ACC","LU0786609619.USD":"高盛全球千禧一代股票组合Acc","LU1074936037.SGD":"JPMorgan Funds - US Value A (acc) SGD","LYFT":"Lyft, Inc.","LU2111349929.HKD":"ALLIANZ GLOBAL SUSTAINABILITY \"AM\" (HKD) INC","POST":"Post Holdings","BAC":"美国银行","LU2552382132.HKD":"WELLINGTON US BRAND POWER \"A\" (HKD) ACC","LU0077335932.USD":"FIDELITY AMERICAN GROWTH \"A\" INC","LU1496350171.SGD":"FRANKLIN DIVERSIFIED BALANCED \"A\" (SGDHDG) ACC","LU2129689605.HKD":"FRANKLIN GLOBAL INCOME \"A\" (HKD) INC","LU2129689514.USD":"FRANKLIN GLOBAL INCOME \"A\" (USD) INC","LU2764262908.HKD":"BGF GLOBAL UNCONSTRAINED EQUITY \"A2\" (HKD) ACC","UBER":"优步","SG9999018865.SGD":"United Global Quality Growth Fd Cl Dist SGD-H","LU1032955483.USD":"NORDEA 1 STABLE RETURN \"HB\" (USDHDG) ACC","BK4525":"远程办公概念","USJW.SI":"ALPHAB 3xLongSG261006","IE00BN29S564.USD":"JANUS HENDERSON BALANCED \"A3\" (USD) INC","IE0004445239.USD":"JANUS HENDERSON US FORTY \"A2\" (USD) ACC","LU0109391861.USD":"富兰克林美国机遇基金A Acc","LU2491050071.SGD":"WELLINGTON SUSTAINABLE OUTCOMES \"A\" (SGDHDG) ACC","IE00BJJMRX11.SGD":"Janus Henderson Balanced A Acc SGD","SGXZ99366536.SGD":"United Global Innovation A Acc SGD-H","LU0052756011.USD":"TEMPLETON GLOBAL BALANCED \"A\" (USD) INC","GB00BDT5M118.USD":"天利环球扩展Alpha基金A Acc","LU1551013342.USD":"Allianz Income and Growth Cl AMg2 DIS USD","BK4550":"红杉资本持仓","LU0130517989.USD":"HARRIS ASSOCIATES US VALUE EQUITY \"R\" INC","LU0353189680.USD":"富国美国全盘成长基金Cl A Acc","GOOGL":"谷歌A","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD","SG9999018857.SGD":"United Global Quality Growth Fd Cl Acc SGD-H","SGXZ51526630.SGD":"大华环球创新基金A Acc SGD","LU2023250504.SGD":"Allianz Thematica Cl AMg DIS H2-SGD","LU0494093205.USD":"贝莱德ESG灵活多元资产A2 USD-H","LU0820561909.HKD":"ALLIANZ INCOME AND GROWTH \"AM\" (HKD) INC","SG9999002232.USD":"Allianz Global High Payout USD","LU1221951129.SGD":"NORDEA 1 STABLE RETURN \"HM\" (SGDHDG) INC","BK4230":"旅客陆运","LU1804176565.USD":"EASTSPRING INV GLOBAL GROWTH EQUITY \"A\" (USD) ACC","LU0306806265.USD":"SCHRODER ISF GLOBAL DIVIDEND MAXIMISER \"A\" ACC","LU2264538146.SGD":"Fullerton Lux Funds - Global Absolute Alpha A Acc SGD","LU0302445910.USD":"SCHRODER ISF GLOBAL CLIMATE CHANGE EQUITY \"A\" ACC","LU2077746001.SGD":"Blackrock ESG Multi-Asset A2 SGD-H","GOOG":"谷歌","BK4514":"搜索引擎","LU0320765059.SGD":"FTIF - Franklin US Opportunities A Acc SGD","LU0788109477.HKD":"BGF GLOBAL ALLOCATION \"A2\" (HKDHGD) ACC"},"translate_title":"1.5 B美元加速股票回购启动后，UBER股票是否值得买入？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"UBER":1,"BAC":1,"GOOGL":1,"POST":1,"LYFT":1,"GOOG":0.61,"USJW.SI":0.6},"content_text":"Shares of Uber Technologies UBER gained 2.7% on Jan. 6, closing the trading session at $66.31. The uptick followed a significant move by the company to return value to its shareholders. UBER announced that it would start an accelerated $1.5 billion stock buyback program. To this end, the San Francisco, CA-based ride-hailing company entered into an accelerated share repurchase (\"ASR\") agreement with Bank of America BAC.\nDigging the Details of UBER’s Accelerated Share Repurchase Agreement\nThe $1.5 billion plan is part of the company's $7 billion buyback program, which it announced last year. We remind investors that the $7 billion share repurchase authorization is the first such program in the company's history.\nUnder the ASR agreement, Uber will pay $1.5 billion to Bank of America and is likely to receive more than $18.5 million shares. This represents about 80% of shares Uber plans to buy back under the accelerated plan. The entire transaction is likely to be wrapped up by the end of the first quarter of 2025.\nWith this bold initiative, UBER is not only enhancing shareholder value but also signaling confidence in its ongoing business strategy. CFO Prashanth Mahendra-Rajah termed the $1.5 billion accelerated share buyback a \"value-enhancing\" move as he believed that Uber stock is undervalued relative to the business's strength.\nGoing by the forward 12-month price/sales ratio, the company’s shares are currently trading at levels lower than its industry and also its 5-year median.\nImage Source: Zacks Investment Research\nTiming of UBER’s Buyback Plan Shows Prudence\nUBER shares have declined 13% over the past three months, underperforming its industry and rival Lyft LYFT.\nImage Source: Zacks Investment Research\nUber shares have dropped on concerns that self-driving cars could eliminate intermediary services. Plans unveiled by Google's GOOGL Waymo to expand its robotaxi (autonomous vehicle) service to Miami have increased investor worries about heightened competition in the rideshare market, hurting UBER stock. Donald Trump’s plans to push for a federal framework supporting self-driving vehicles have also hit UBER shares.\nThe current buyback announcement, signaling confidence in business, is therefore perfectly timed.\nFavorable Earnings Estimate Revisions for UBER\nEarnings estimates for 2024 have moved up 80% to $1.89 over the past year, while the same for 2025 has improved 45.4% to $2.53. The positive estimate revision depicts bullish sentiments for UBER stock.\nImage Source: Zacks Investment Research\nUBER’s Prospects Remain Healthy\nEven though Uber’s primary business is ride-sharing, it has diversified into food delivery and freight over time. Diversification is imperative for big companies to reduce risks, and UBER has excelled in this area. It has engaged in numerous strategic acquisitions, geographic and product diversifications and innovations.\nUber’s endeavors to expand into international markets are commendable and provide it with the benefits of geographical diversification. Prudent investments enable Uber to extend services and solidify its comprehensive offerings. Uber’s ride-sharing as well as delivery platforms are growing in popularity. This is generating strong demand, which, along with new growth initiatives and continued cost discipline, are driving the company’s results.\nIt Still Isn’t an Opportune Time to Buy UBER Stock\nDespite the above-mentioned tailwinds and the buyback-related announcement, there are a couple of factors that keep us cautiously optimistic. We are concerned about Uber’s high debt levels. Long-term debt increased 31.5% to $11 billion at third-quarter 2024-end from 2019. \nImage Source: Zacks Investment Research\nThe slowdown in UBER’s gross bookings, as witnessed in the third quarter of 2024, raises grave concerns. Total gross bookings in the September quarter increased 16% year over year to $41 billion. The year-over-year growth was less than the 19% witnessed in the second quarter of 2024, highlighting the growth slowdown.\nUber expects gross bookings in the final quarter of 2024 to have been hurt by currency-related headwinds. Uber, which dominates the North American ride-sharing market, is likely to increase its focus on suburban markets to drive growth amid fears of market saturation.\nConsidering all factors, we believe it is preferable to stay on the sidelines for this Zacks Rank #3 (Hold) stock currently.\nYou can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\nBank of America Corporation (BAC) : Free Stock Analysis Report\nAlphabet Inc. (GOOGL) : Free Stock Analysis Report\nLyft, Inc. (LYFT) : Free Stock Analysis Report\nUber Technologies, Inc. (UBER) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"shareholding,buyback","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.30.2","shortVersion":"4.30.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2501786765"}