Shares of the San Francisco-based ride-sharing leader bounced nearly 2% in early trading moving toward its initial IPO pricing on May 10. The recovery comes up from a precipitous post-IPO move that led to a low of about $36 per share in its second day of trading.
The positive stock implication comes as a slew of "Buy" ratings flow in from Wall Street analysts no longer beholden to the quiet period required after their firms underwrote the massive IPO.
"Initiating with Outperform & $62 price target," RBC Capital Markets analyst Mark Mahaney began his first public take. "Uber is the leading global player in massive ridesharing & meal delivery TAMs, generating robust growth, with leading technologies, products & ops. We also see significant option value in new business units (e.g. Freight). We believe the market underappreciates UBER's profit potential."
The spate of bullish calls from analysts at firms like Morgan Stanley, Bank of America, and Goldman Sachs, and more comes following the release of Uber's first 10-Q filing. Per SEC rules, the publication of analysis from firms involved in the IPO underwriting process, or insiders, is permitted following this public filing.
The rules against the release of research and information from the firms prior to the document filing is intended to keep information uniform across the market and avoid allowing firms with added information from releasing any insider information prior to public knowledge.
After a steep slide after the IPO, the majority of analysts publishing research on Tuesday concurred, noting significant upside potential for the shares that remain below the initial offering price.
"We see Uber as the most attractive Internet IPO since Facebook FB and believe that concerns related to Uber's profitability outlook pose less risk than Facebook's transition to mobile at that time," Deutsche Bank analyst Lloyd Walmsley told clients. "On valuation, investors are not giving Uber the benefit of the doubt."
For more on what Wall Street is saying and the competitive picture with Lyft, as well as key insights from more mature ridesharing arrangements abroad, check out Real Money's Stock of the Day coverage.