Uber Trade Call Based on Forward PE and Earnings Estimates

30 days ago

Parkev Tatevosian, CFA

"I own Uber stock in my portfolio and I rated Uber as the best stock to buy this year. So, if the company remains on track to deliver $4.51 in earnings per share and the forward PE multiple remains the same, the stock price could end next year at $106 per share, which would be a rate of return of over 25% in a single year, which is a solid return on investment for a stock like Uber with relatively medium levels of risks. But I actually think Uber's forward PE multiple will increase next year. And if the forward PE multiple increases to 26, the stock price could rise to $117 per share."

The speaker asserts that Uber is the best stock to buy this year based on its current valuation and forward PE multiple. He provides a scenario analysis where if Uber maintains its earnings and the forward PE remains stable, the stock could hit $106 per share next year, offering a 25% return. He further suggests that an increase in the forward PE to 26 could boost the price to $117 per share, making a bullish case for Uber despite risks posed by Tesla's driverless technology.

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