Stock Analysis

Institutions are Positioning to Profit From Uber's (NYSE:UBER) Turnaround

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After months of a downward trend, Uber Technologies, Inc. ( NYSE: UBER ) finally reached a turning point, propelled by hopes of profitability. On this revised schedule, the company will publish breakeven results for Q3 before turning profitable in Q4.

In this article, we'll look at the latest developments in the company and examine the current shareholder structure.

Check out our latest analysis for Uber Technologies

Improving Margins and a New Partnership

At the recent Goldman Sachs conference, CEO Dara Khosrowshahi reflected on the developments from this year, stating that the returning demand helped boost the margins. He now expects that the adjusted EBITDA for Q3 will oscillate around breakeven before turning an adjusted EBITDA profit in Q4 – to a tune of US$100m.

Although Mr.Khosrowshahi has stated that the employees are making 20-30% more compared to historical levels, places like New York City are set to improve the conditions, especially for food delivery drivers.

New measures should include minimum payments per trip, restroom access, greater tip transparency, removing fees for insulated bags, and setting the delivery area limits.

Meanwhile, the delivery business is growing, with Rite Aid ( NYSE: RAD ) announcing the expansion of partnership with Uber. At the moment, the drugstore is offering on-demand delivery across 17 states.

Furthermore, Uber is joining the holiday shopping season, launching its first Holiday Shop through the Uber Eats platform. Initially, this will allow the customers of specific areas on the west coast to order Halloween-themed items, but it should expand and transition to a seasonally-driven shop.

An Overview of the Ownership

Uber Technologies has a market capitalization of US$86b, so it's too big to fly under the radar. We'd expect to see both institutions and retail investors owning a portion of the company.

In the chart below, we can see thatinstitutions are noticeable on the share registry.

NYSE: UBER Ownership Breakdown October 6th, 2021

What Does The Institutional Ownership Tell Us About Uber Technologies?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Uber Technologies already has institutions on the share registry, and they own a respectable stake in the company.This suggests some credibility amongst professional investors.

But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does.If multiple institutions change their view on a stock simultaneously, you could see the share price drop fast.

It's, therefore, worth looking at Uber Technologies' earnings history below.

NYSE: UBER Earnings and Revenue Growth October 6th, 2021

Institutional investors own over 50% of the company, so together, they can probably strongly influence board decisions.We note that hedge funds don't have a meaningful investment in Uber Technologies.

Our data shows that the largest shareholder is SoftBank Investment Advisers (UK) Limited, with 6.9% of shares outstanding.In comparison, the second and third largest shareholders hold about 5.4% and 4.3% of the stock.

After doing some more digging, we found that the top 25 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

Researching institutional ownership is an excellent way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments.There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Uber Technologies

The definition of an insider can differ slightly between different countries, but the board of directors members always count.The company management answer to the board, and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Insider ownership is generally a good thing. However, it makes it more difficult for other shareholders to hold the board accountable for decisions on some occasions.

Our most recent data indicates that insiders own less than 1% of Uber Technologies, Inc.It is a huge company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own US$117m worth of shares (at current prices).

In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public, with a 23% stake in the company, will not easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 6.9%, private equity firms could influence the Uber Technologies board. Some investors might be encouraged by this since private equity can sometimes encourage strategies that help the market see the value in the company.

Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

Uber is making a turnaround with profitability on the horizon. Institutions have been betting on this and have amassed a stake of over 70%.

This should provide stability, but to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Uber Technologies .

Ultimately the future is most important . You can access this free report on analyst forecasts for the company .

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12 months ending on the previous date of the month the financial statement is dated. This may not be consistent with full-year annual report figures.

What are the risks and opportunities for Uber Technologies?

Uber Technologies, Inc. develops and operates proprietary technology applications in the United States, Canada, Latin America, Europe, the Middle East, Africa, and the Asia Pacific.

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  • Trading at 54.1% below our estimate of its fair value

  • Earnings are forecast to grow 76.26% per year


  • Shareholders have been diluted in the past year

  • Significant insider selling over the past 3 months

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Simply Wall St analyst Stjepan Kalinic and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Stjepan Kalinic

Stjepan Kalinic

Stjepan is a writer and an analyst covering equity markets. As a former multi-asset analyst, he prefers to look beyond the surface and uncover ideas that might not be on retail investors' radar. You can find his research all over the internet, including Simply Wall St News, Yahoo Finance, Benzinga, Vincent, and Barron's.


Uber Technologies

Uber Technologies, Inc. develops and operates proprietary technology applications in the United States, Canada, Latin America, Europe, the Middle East, Africa, and the Asia Pacific.

Reasonable growth potential and fair value.