Uber (UBER) - Get Uber Technologies, Inc. Report was rising slightly in premarket trading Tuesday after analysts at Stifel initiated coverage of shares of the ride-sharing company with a hold rating though said it was bullish on the company's transportation and food delivery services.
Stifel also placed a $50 price target on the stock, a potential 13% upside from the stock's closing price Monday of $44.27.
While the firm liked Uber's main revenue sources, it said it Uber has a long road to profitability.
"The questions currently driving the Uber debates are the company's ability to achieve long-term growth targets and the path to profitability. In order to achieve our $36B adj. net revenue forecast by 2023, we expect Uber will need to have over 200mm monthly active platform customers spending over $700 annually. Expected competitive rationality to revisit our estimates and view on the shares," analyst Scott Devitt said.
Separately, the firm also raised its price target on Lyft (LYFT) - Get Lyft Inc Class A Report shares to $76 from $70 following the stock's 14% decline from its initial public offering price of $72 a share.
Uber shares were rising 0.7% to $44.60 per share. Lyft shares were gaining 0.8% to $62.50.