The price target for Uber Technologies (NYSE:UBER) stock was nearly halved by Atlantic Equities analyst James Cordwell on Wednesday due to concerns about the company’s near-term delivery business as well as reaction to a new partnership between Amazon (AMZN) and GrubHub. As a result, the stock of Uber Technologies (NYSE:UBER) fell by almost 4% on the day.
According to Cordwell, who previously set a price target of $60 for the company, (NYSE:UBER) shares, the market leader in ride-sharing may experience “muted” growth in its delivery operation. However, Cordwell also mentioned that as its operations recover, the economy continues to reopen, and it runs more effectively, it is probably “on the threshold of major free cash flow expansion” and net profitability. Additionally, Cordell predicts that even while there are some short-term worries regarding the ride-share company’s delivery business, it will most likely have “multiple years of strong double-digit growth” in the medium term, and its advertising business should support excellent profitability. The competition environment appears “benign,” expectations are low, and investments in acquiring more drivers to better meet demand have made ride-sharing giant’s mobility business “well-positioned,” according to Cordwell.
The major competitor of Uber, Lyft (LYFT), also experienced a decline in its stock, falling more than 4%. The news of new Amazon operations shook up the food delivery sector (AMZN). The e-commerce behemoth, which also owns Whole Foods, announced a pact to provide Amazon Prime subscribers access to GrubHub delivery. In addition, Amazon (AMZN) exercised an option to buy a 2% investment in GrubHub, with a potential increase to 15% if certain performance goals are fulfilled.
About Uber
The American company Uber Technologies, Inc. (Uber) (NYSE:UBER), offers mobility as a service. It has operations in around 72 countries and 10,500 cities and is centered in San Francisco. It offers ride-hailing, food delivery (via Postmates and Uber Eats), package delivery, courier services, freight transportation, the rental of electric bicycles and motorized scooters thanks to a relationship with Lime, and ferry service in cooperation with regional operators. The company does not own any vehicles; rather, it makes money off of each booking. The consumer receives a quotation for the fare in advance, but it can change according to the supply and demand in the area at the time of the booking.
The company, which started off focusing on ride sharing, provides a wide variety of ride alternatives. The most well-known and consistent offering from the company is UberX. The firm also provides UberXL, Uber Comfort, and Uber Black as additional alternatives. UberXLs typically have an SUV-style body and provide room for up to 6 passengers. Uber Black is Uber’s premium offering. Drivers of Uber Black are required to have a high rating[8] and operate more opulent vehicles than those of UberX and UberXL. Uber Comfort promises a newer vehicle with extra space for passengers. When choosing transportation, clients have more flexibility thanks to the various possibilities.
About Grubhub
American online and mobile food ordering and delivery service Grubhub Inc. The business was started in 2004 and has its headquarters in Chicago, Illinois. Just Eat Takeaway, a Dutch firm, owns the business. Grubhub has come under fire for violating antitrust laws by manipulating prices, listing eateries without their consent, and possibly misclassifying employees. In April 2014, Grubhub Seamless went public and started trading on the New York Stock Exchange (NYSE) under the ticker “GRUB.”
As of 2019, the company had 115,000 affiliated restaurants spread throughout 3,200 cities and all 50 states of the USA, 19.9 million active users, and 3,200 localities.
About Amazon
A global American technology business, Amazon.com, Inc., specializes in e-commerce, cloud computing, digital streaming, and artificial intelligence. One of the most valuable brands in the world, it has been called “one of the most significant economic and cultural forces in the globe.” Along with Alphabet, Apple, Microsoft, and Meta, it is one of the Big Five American technological firms.
On July 5, 1994, Jeff Bezos launched Amazon from his garage in Bellevue, Washington. It began as an online book marketplace but has now grown to include a wide range of goods, earning it the nickname “The Everything Store.” Amazon Web Services (cloud computing), Zoox (autonomous vehicles), Kuiper Systems (satellite Internet), and Amazon Lab126 are just a few of its numerous subsidiaries (computer hardware R&D). The company also has subsidiaries for Ring, Twitch, IMDb, and Whole Foods. With the $13.4 billion purchase of Whole Foods in August 2017, it significantly expanded its physical retail reach.
Through technological innovation and broad distribution, Amazon has acquired a reputation for upending well-established sectors. In terms of revenue and market share as of 2021, it is the biggest online retailer and marketplace, supplier of smart speakers, cloud computing service through AWS, provider of live-streaming service through Twitch, and Internet firm worldwide. With more than 200 million users globally to its paid subscription scheme, Amazon Prime, it eclipsed Walmart in 2021 to become the largest retailer in the world outside of China. It is the country’s second-largest private employer.
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