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Bloomberg
Uber Technologies Inc has been on the wrong side of investor sentiment since its debut on the public market this year, and Barclays analyst Ross Sandler said the ride-hailing company could be “one major announcement†away from a change in the narrative.
Shares of the company came under significant pressure around the expiry of its IPO lockup period — when selling restrictions for early investors and insiders ended— and Sandler expects those concerns will now diminish, with fourth-quarter results likely to be more impressive than the third quarter.
“This cocktail should produce outsized returns for those willing to take the extreme risk,†Sandler wrote in a note to clients, even though sentiment around Uber is currently the most negative in Barclays’ coverage universe.
Uber earlier this month said it expected to be profitable by 2021, much earlier than Wall Street expectations, but the optimism was marred by tepid results from the food delivery segment, where booking lagged estimates amid continued competitive pressures. The company is also challenging several states that say they’re misclassifying drivers as independent contractors, and New Jersey hit the company with a $650 million tax bill.