Uber Technologies Inc. is making significant strides towards becoming a part of the prestigious S&P 500 index, potentially as early as next year. Analysts assert that the company’s stock has become impossible to ignore due to its recent turnaround.
A Shift in Fortunes
Though Uber faced initial challenges as a publicly traded company, it has considerably improved its performance and sustainability. Its profitability, based on generally accepted accounting principles (GAAP), has become a realistic possibility. While Uber checks off nearly all the requirements for S&P 500 inclusion, it still needs to demonstrate positive GAAP earnings over the trailing twelve months and in its most recent quarter to fulfill the final criterion.
Uber’s Path to Inclusion
According to Bernstein analyst Nikhil Devnani, Uber could achieve this milestone by the second quarter of 2024. Hence, inclusion into the S&P 500 may be feasible within the latter half of that year.
Investors are urged to heed stocks that have the potential to join the S&P 500 in the near future, as history indicates significant benefits. Devnani points out that changes to the index occur frequently, and stocks typically experience substantial outperformance in the six to twelve months leading up to S&P inclusion.
Uber’s Potential Inclusion in the Index
Barclays analyst, Bernstein, recently conducted a study on the “largest new entrants” to the index from 2010 to 2023. The findings revealed that these companies outperformed the market by 68% in the year leading up to their inclusion and by 33% in the six months prior. However, the study did not observe a significant increase in stock performance following their inclusion.
Although meeting eligibility criteria does not guarantee a place in the index, Uber has several factors working in its favor, according to Devnani. Firstly, its substantial size makes it an attractive candidate, with a current market capitalization of over $95 billion. Additionally, being classified as an industrials company rather than an information-technology company may improve its chances with the index committee, which considers sector balance when making determinations.
On the flip side, Uber holds around $5 billion in equity stakes, which Devnani warns can have a substantial impact on net income when subject to regular mark-to-market valuation adjustments. However, releasing these stakes could enhance earnings predictability and potentially provide capital for buybacks.
Devnani has given Uber an outperform rating and set a $50 target price on its shares. Despite this, he has also outlined a path towards a potential $60 price target.
Domino’s Pizza Expands Its Delivery Reach with Uber Eats
As the demand for convenient food delivery continues to rise, Domino’s Pizza has stepped up its game by partnering with Uber Eats. This new collaboration allows customers to enjoy their favorite pizzas from the comfort of their own homes, without the hassle of cooking or venturing out to pick up their orders.
With the introduction of Uber Eats as a delivery option, Domino’s aims to maximize its sales potential and reach a wider customer base. By embracing this innovative approach, the renowned pizza chain is capitalizing on the convenience and popularity of third-party delivery services.
By joining forces with Uber Eats, Domino’s can tap into a vast network of drivers and leverage their infrastructure to ensure speedy and efficient delivery. This unparalleled partnership sets the stage for Domino’s to achieve its ambitious sales goals while maintaining the quality and taste that loyal customers have come to expect.
Domino’s commitment to delivering exceptional pizzas remains unwavering. Whether you’re craving a classic margherita or a specialty pizza loaded with mouthwatering toppings, Domino’s has you covered. With their robust menu and commitment to using only the finest ingredients, Domino’s continues to set the standard for pizza perfection.
In today’s fast-paced world, where convenience is king, the collaboration between Domino’s and Uber Eats is a game-changer. So sit back, relax, and let Domino’s and Uber Eats bring your favorite pizzas right to your doorstep, leaving you with more time to enjoy life’s moments.