From its launch as a ridesharing start-up in 2009, Uber Technologies (UBER) has completely reshaped itself into a global tech company. It now offers many other services beyond just providing a mode of transportation, and its outstanding growth last year fueled UBER stock to skyrocket by 148% over the course of 2023, wildly outperforming the S&P 500 Index’s ($SPX) surge of 25%.

Uber also claimed a position as one of the best-performing growth stocks last year, besides the market darlings - the artificial intelligence (AI)-powered stocks. Positive earnings over four consecutive quarters also qualified Uber for inclusion in the S&P 500 Index, which propelled its stock price higher.

The company's recent fourth-quarter results and a strong end to 2023 further highlighted its strengthening fundamentals. Wall Street has high expectations for Uber in the coming years, with the stock expected to rise by up to 30% in 2024.

Just one and a half months into 2024, Uber’s stock is already up 24.8%, compared to the broader market’s advance of 4.8%. Can UBER stock reach $100 in 2024? Let’s find out. 

Uber's Rapid Evolution from Ridesharing

Founded in 2009, Uber is no longer just a ridesharing app known for its seamless, timely rides at competitive prices. The company has now evolved to include delivery and freight with Uber Freight, Uber Eats, and UberX, among other services. San Francisco-based Uber has become a global icon, running operations in 70 countries and 10,000 cities.

While the ridesharing business contributes to a chunk of Uber’s revenue, the business expansion has also allowed the company to grow faster. Notably, revenue has increased from $10.4 billion in 2018 to $37.3 billion in 2023. Uber smashed Wall Street’s expectations in its recently reported fourth quarter of 2023.

In Q4, Uber’s total revenue increased 15% year-over-year to $9.9 billion, surpassing the consensus estimate by $174.06 million. Net earnings of $0.86 per share in the quarter also beat the estimate of $0.45.

Total trips in the fourth quarter rose by 24% to $2.6 billion, with a 22% increase in gross bookings. While freight revenue declined in the quarter, mobility and delivery revenue grew, accounting for 88% of total revenue. In the Q4 earnings call, CEO Dara Khosrowshahi emphasized that the number of drivers increased by 30% year on year, which helped boost Mobility segment revenue. Management credited the company's outstanding growth to its AI-driven platform. At the end of the fourth quarter, Uber had 150 million monthly active platform consumers, a 15% year-over-year increase.

In Q4, Uber launched numerous sponsored items as part of Uber Eats in Brazil, Costa Rica, Mexico, and Chile. Management expects its advertising business to be a "$1 billion run-rate business next year." Furthermore, membership is a significant growth driver for the business. Uber One currently has 19 million members in 25 countries.

 At the end of the fourth quarter, Uber had $5.4 billion in cash, cash equivalents, and short-term investments. Uber also generated a massive free cash flow of $768 million in Q4. Uber’s debt-to-equity ratio is high at 0.79, but increasing positive free cash flow should allow it to repay its debts sooner.

Higher Growth Ahead

Analysts have revised Uber’s earnings and revenue growth estimates upwards more than 20 times in the last three months. An increase in estimate revisions is often regarded as a positive indicator of analysts' confidence in the company's long-term growth prospects. The following are analysts' year-over-year growth projections for Uber over the next two years:

• For 2024: Earnings growth of 36.9% and revenue growth of 15.8%
• For 2025: Earnings growth of 62.4% and revenue growth of 15.7%

Uber's valuation appears to be high, at 57 times forward earnings. However, given its future growth prospects, it may be worthwhile to pay the premium now. 

What Are Analysts Saying About Uber Stock?

Recently, Wells Fargo analyst Ken Gawrelski shared his optimistic outlook for Uber. The analyst’s confidence stems from strong growth in the mobility segment, as well as improvements expected in the grocery and advertising businesses in 2024. 

Furthermore, Gawrelski believes the expectation that management will allocate 60% to 80% of FCF from 2024 to 2026 to share purchases further instills confidence in the company’s growth potential. Today, in fact, UBER is rallying on news of a $7 billion buyback plan. The analyst has a “buy” rating on the stock, with a price target of $79.

Overall, Wall Street rates UBER stock a "strong buy.” Of the 38 analysts covering UBER, 33 have rated it a “strong buy,” three have a “moderate buy” recommendation, and two suggest a “hold.” 

UBER is trading slightly north of its mean price target from analysts, but its high target price of $90 implies a potential upside of 17%.

The Bottom Line for UBER Stock

Uber maintained its growth trajectory last year, which led to the massive spike in its stock price. If Uber stock were to reach $100 within the next year, it must rise by nearly 45% from current levels. I believe $100 is a realistic target by the end of the year, assuming Uber's earnings growth continues at this pace or higher throughout 2024.