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Wedbush analysts said ahead of Uber’s (NYSE:UBER) FY3Q22 results on Tuesday, November 1, before the bell, that they expect the company to post “generally solid results.”
The analysts, who have an Outperform rating and a $38 price target on the stock, said Uber’s September Results should be a positive step forward. Wedbush sees Uber beating the Street and posting “strong guidance despite recent regulatory headwinds adding more uncertainty.” They pointed to challenges such as the U.S. Labor Department unveiling a much-anticipated proposal that would make it more likely that gig economy workers be classified as employees rather than independent contractors.
“While this remains a fluid situation, we believe that the DOL proposal adds more uncertainty to the gig economy and view the chances of full reclassification to employee status for all U.S. rideshare workers as very low. Uber has already begun to roll out unconditional upfront pricing, allowing drivers to know the exact pickup and drop-off location before accepting the ride. This will be important in helping Uber avoid making its drivers classified as employees but will increase fares and wait times as driver rejection of rides will increase,” explained the analysts.
“While FX headwinds will persist, the Street expects Uber’s total revenue to be $8.12 billion which we believe is a hittable number as the company continues its push into new international markets. We believe the Street’s September EPS estimate of ($0.18) is somewhat conservative as the company has placed a strong emphasis on growing margins along with its aggressive growth plan.”
