How to buy Uber stocks in 2021
Uber Technologies, or simply Uber is an American corporation with operations on all continents. It connects consumers with independent providers of ride services, and with restaurants, grocers, and other stores via its mobility and delivery divisions. Here we provide a guide on how to buy Uber stocks and what are the most relevant financial information to consider.
Uber grew at staggering rates in the years leading up to its IPO in the United States. It now registers over sixteen million daily trips and over ninety million monthly customers. It is active in almost ten thousand cities across seventy-one countries.
How to Buy UBER Stocks in 5 Easy Steps
1Visit eToro through the link below and sign up by entering your details in the required fields.
2Provide all your personal data and fill out a basic questionnaire for informational purposes.
3Click 'Deposit', choose your favourite payment method and follow the instructions to fund your account.
4Search for your favourite stock and see the main stats. Once you're ready to invest, click on 'Trade'.
5Enter the amount you want to invest and configure your trade to buy the stock.
Everything You Need to Know About Uber
Let’s begin our analysis of Uber’s businesses by looking at the company’s history and strategy, as well as how it makes money and how its stock has performed in recent years.
Uber is a relatively new company, founded in 2009 and headquartered in San Francisco, California. It was founded by Garrett Camp and Travis Kalanick under the name of Ubercab and quickly grew into one of the most famous American unicorns (i.e., privately held startups with a valuation of more than one billion dollars).
Its services expanded from ride-hailing to food and package delivery, couriers, freight transportation, and even motorized scooter rental via a partnership with Lime. It groups its operations into four divisions: mobility, delivery, freight, and advanced technologies group.
What Is Uber’s Strategy
This is a technology company that simply connects demand with supply. Its proprietary platforms connect consumers with mobility drivers of all types, such as taxis, minibuses, and motorbikes.
Despite being best known for its ride-hailing business, Uber quickly expanded into other areas such as financial partnerships and vehicle solutions. The delivery segment got a lot of attention recently because online food deliveries increased exponentially when the pandemic affected the restaurant services industry.
How Does Uber Make Money?
On May 5, 2021, Uber reported the financial highlights for the first quarter of the year. Gross bookings reached an all-time high of $19.5billion, up over 24% on a year-over-year (YoY) basis.
In a year affected by the pandemic, and with people forced to spend more time at home due to travel restrictions, Uber’s business model was strongly impacted. Therefore, the mobility division contracted by 38% in 2020 but the company compensated by double-digit growth in the freight division and triple-digit growth in the delivery division.
Uber makes money through ridesharing and carpooling, meal delivery and freight, electric bikes, and scooters. More recently, it expanded its services into urban aviation, and it also invested heavily in autonomous vehicles.
How Has Uber Performed in Recent Years?
Uber’s stock price had a pretty bumpy ride after it became public on 9 May, 2019. The company managed to survive the pandemic and the selloff that affected the international financial markets, and — like other tech companies — it bounced back strongly.
The share price reached $60 and found strong horizontal resistance at that level, with a possible triple top formation in place. This is the “technical analysis” picture for Uber stock.
Where Can You Buy Uber Stock?
The investor has various ways of getting exposure to the Uber share price.
First, investors may simply buy ordinary shares, either on cash or margin via a stock brokerage account. Buying on cash means that no money is borrowed from the broker, so you’ll only lose your initial investment if the company’s share price drops to zero. Buying on margin means borrowing some of your investment capital from the broker, so you can buy more shares with less of your money, but this means your investment can be wiped out with a more modest reversal of Uber’s share price unless you deposit more money when the broker asks for it.
Second, investors can trade contracts-for-difference (CFDs), which are derivative products that act as simple “bets” on which way the Uber share price will go. These products are usually leveraged, which means you’ll be buying on margin with all the risks that this implies.
Uber Fundamental Analysis
There is a difference between stock trading and investing.
Traders use mostly “technical analysis” over a short-term horizon, whereas investors mostly use “fundamental analysis” to look at companies’ long-term prospects.
Fundamental analysis is based on interpreting a company’s financial statements, such as the income statement, the balance sheet, and the cash flow statement. Based on the information presented in the financial statements, investors calculate various ratios and carry out complex calculations to derive to what they believe to be the intrinsic value of a company. By comparing the result with the actual market price, investors conclude that the company’s shares are overvalued, undervalued, or properly valued.
In the following sections we look at Uber’s revenue, price/earnings ratio (P/E), dividend yield, earnings-per-share (EPS), and cash flow position.
Uber’s business model has been affected by the pandemic. In particular, the mobility division suffered significant declines due to the lockdowns and limited mobility in most parts of the world. However, Uber’s mobility division revenue is expected to pick up in the upcoming quarters as restrictions are lifted and the vaccination campaigns prove to be effective in curbing the COVID-19 spread.
Revenue is the first line of a company’s income statement and it reflects the total value of goods and services produced or delivered by the company in a period. It is one of the most important financial metrics, and the higher the number, the better for the company and its investors.
In the three months ended 31 March 2020, Uber’s revenue declined by 11%, mostly on the back of a $600 million accrual made for the resolution of some historical claims in the United Kingdom. The delivery and freight divisions grew by 230% and 51% respectively when compared to the same period in 2020.