→ Are traders using AI to overcome volatility? (from the vantage point)
Let’s face it, 2022 was an ugly year for the stock market, with the NASDAQ 100 (32.58%) and S&P 500 (18.17%) falling. Individual titles fared even worse. The two bright areas of performance were in the energy and healthcare sectors. Rising interest rates caused bond yields to rise and investors to rush into fixed income. Who would have thought that money market rates would rise by 4%?
Unfortunately, Silicon Valley Bank (NASDAQ:SIVB) didn’t believe it as it locked nearly $100 billion in 1.79%-yielding 3.6-year notes betting rates would stay low. This backfired, causing a run on the bank, a failed fundraiser, and eventual bankruptcy within days when the FDIC took over. Most portfolios have taken a hit, and investors are looking to recover in 2023. Here are two battered stocks that have the potential to help your portfolio recover in 2023.
What began as an unlicensed cab operator eventually evolved into a carpooling monopoly in the United States. It spent billions of investor dollars to ruthlessly and aggressively grow market share and build its network with crazy payout bonuses for new drivers and cheap, subsidized passenger (pax) rides to get them hooked.
The early growth drug dealer template
Like a drug dealer, Uber entered a new neighborhood, handing out free samples to potential drivers and their friends, and offering significant rewards to new drivers. Anything to get them hooked after trying the product. Drivers would make big money, and passengers would get cheap rides, such as initially selling a $5 cheeseburger for $0.25. The aim was to build up the liquidity of numerous on-app live drivers in order to minimize the waiting times for numerous passengers. This only works if the liquidity is there; It takes liquidity and lots of money to get there.
As liquidity built, Uber would slowly reduce driver bonuses and increase driver fees, with a more significant cut. Despite calls for driver wages and attempts by government intervention to reclassify drivers’ status as independent contractors, Uber has been a Teflon, forcing local governments to bend to the will of the people and of Uber.
Bend the government backwards
If the local taxi cartel convinces local governments to crack down on regulations, Uber will threaten to leave the area, prompting residents to complain. When Houston, Texas called their bluff to force them to reform their rules in 2016, Uber followed up on his threat to leave the company. It went up and down, leaving 10,000 drivers without an appearance and numerous passengers without a ride. The bureaucrats believed that Uber and Lyft Inc. (NASDAQ:LYFT) Holidays would open the market up to more competition, with many startup ridesharing companies stepping in to fill the gap.
They failed miserably as ridesharing became even more fragmented and thinly funded startups went bankrupt. A year later, new Texas law was enacted allowing Uber and other ridesharing services to resume offering their services in Houston. This laid the template for Uber’s dominance.
verb become
His name has earned the rare distinction of becoming a verb synonymous with ordering a ride with a private driver through an app anywhere, anytime. The pandemic reopening amplified its pandemic and fares as the company nears actual GAAP earnings.
path to profitability
Uber’s master plan (minus autonomous driver network) is bearing fruit, GAAP profitability. Uber has become the dominant force in ridesharing, and its metrics are growing significantly. With most businesses that experienced meteoric spikes during reopening now facing normalization, Uber continues to break records. Enter 2023, from the analogy of offering $5 cheeseburgers for $0.25, Uber is now selling $5 cheeseburgers for $10 and up, and the public can’t get enough.
The fourth quarter of 2022 was its “strongest quarter ever,” as revenue rose 49% year over year to $8.61 billion. Gross bookings grew 19% year over year to $30.7 billion. Rideshares grew 31% year over year. Even Uber Eats’ delivery business continued to grow 6% year over year. It even forecast 20% revenue growth for the first quarter of 2023 as the company expects to be GAAP profitable by the end of the year. Pullback support levels are at $28.28, $26.54 weekly MSL trigger, $25.08 and $23.90.
The MarketBeat MarketRank™ Forecast gives it 2.5 stars out of 5 with a price target 51.5% up from $47.13 per share.
While wealth management firms try to attract affluent and established clients, SoFi attracts early-career clients as college students. Providing student loans to college students and bundling an all in one and one stop shop for all things financial was the perfect formula. Attracting high-income millennials early on, the company offers student loans for banking services, mortgage financing, investing, retirement planning, and retirement wealth planning services. They exemplified the network effect and fostered brand loyalty.
Promote generational customers
Banks preach about cross-generational customers but stick to the same songs, dances and lip service. SoFi empowers generational customers through the different financial stages of their lives. The company is profitable in the lending business. It grew deposits by 86% in the third quarter of 2022. It’s still expanding its financial services, which is weighing on profits. Q4 2022 GAAP net revenue increased 60% year-on-year to $457 million and achieved record Adjusted EBITDA of $70 million, a 15.3x increase year-on-year. In Q4, 480,000 new members joined, bringing the total membership to over 5.2 million, a 51% increase year-on-year. In Q4, 695,000 new products were added to 7.9 million, up 53% year over year. It targets to achieve GAAP profitability in Q4 2023. The pullback support levels are at $5.17, $4.88 weekly MSL trigger, $4.53 and $4.24 swing low.
The MarketBeat MarketRank™ Forecast gives it 2.5 stars out of 5 with a price target of $8.42 per share up 50.8%.
Before you consider Uber Technologies, you should hear this.
MarketBeat tracks Wall Street’s best-in-class, top-performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are softly whispering to their clients to buy now, before the broader market takes hold… and Uber Technologies wasn’t on the list.
While Uber Technologies is currently rated a “Moderate Buy” by analysts, top analysts believe these five stocks are better buys.
Check out the five stocks here
Elon Musk’s next step
Are you wondering when you can finally invest in SpaceX, StarLink or The Boring Company? Click the link below to learn when Elon Musk will finally list these companies.
Get this free report
