Uber (UBER) stock jumped early Tuesday after the ride-hailing and food-delivery company reported second-quarter earnings that exceeded expectations after a surprise first-quarter loss. Revenue grew 16% year-over-year, the fastest pace in five quarters.
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Uber said that it earned 47 cents per share on sales of $10.7 billion for the June-ending quarter. On average, analysts projected the San Francisco-based company would post earnings of 31 cents per share on revenue of $10.6 billion, according to FactSet. For the same period a year earlier, Uber earned 18 cents per share on sales of $9.2 billion.
Chief Executive Dara Khosrowshahi highlighted that Uber’s total trip grew 21% year-over-year, to 2.77 billion for the quarter. “The Uber consumer has never been stronger,” he said in a news release. “More people are using the platform, and more frequently, than ever before.”
In premarket trading on the stock market today, Uber stock is up 8% at 63.24. U.S. ride-hailing rival Lyft (LYFT) bounced 4% after skidding Monday to a nine-month low intraday. Lyft reports earnings tomorrow morning.
Uber Overcomes ‘Noise’ At Start Of Quarter
Uber also topped analyst expectations for two closely watched metrics. Gross bookings grew 19% year-over-year to $40 billion, ahead of analyst forecasts of $39.6 billion. Bookings include fares charged, as well as food deliveries and other services.
Meanwhile, Uber’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $1.57 billion topped estimates of $1.5 billion for the quarter.
“Uber drove strong second-quarter results, with all key metrics coming at least in line with Street expectations in the quarter, despite noise entering the second-quarter reporting period surrounding potential consumer weakness,” William Blair analyst Ralph Schackart told clients early Tuesday.
For the current quarter, Uber told investors it is expecting gross bookings of $40.25 billion and $41.75 billion. The midpoint of the range is slightly lower than analysts’ prior projections of $41.18 billion in booking for the September quarter, according to FactSet.
However, the company did offer better-than-expected estimates for its adjusted earnings in the current quarter. Uber projected EBITDA between $1.58 billion and $1.68 billion for the third quarter, with a midpoint just ahead of analysts’ $1.63 billion forecast.
“The beat on adjusted EBITDA in the second quarter, and guidance being set modestly above Street expectations at the midpoint, demonstrates Uber’s continued ability to drive not only top-line growth but strong profitability results,” William Blair’s Schackart added in the client note. He holds a positive outperform call on Uber stock.
Uber Stock: Ad Business Growing
The news release from Uber highlighted its growing advertising segment. The company said its annual run-rate for advertising-related revenue exceeded $1 billion for the quarter.
Meanwhile, more people are using the Uber app overall, whether for rides or food delivery. Monthly active platform consumers grew 14% year-over-year to 156 million, Uber said.
Ride-related revenue grew 25% for Uber to $6.1 billion, significantly faster than food delivery’s 8% growth to $3.3 billion in sales.
Uber Stock: Down 5% In 2024 Prior To Report
Uber stock fell 1% in Monday trading, sliding intraday to its lowest levels since last November. Prior to the Q2 report, Uber shares were ahead 29% from 12 months earlier but down 5% year-to-date. The stock has slumped amid concerns about Tesla launching its own robotaxi service and growing fears of a U.S. recession.
Coming into the report, Uber stock had an IBD Composite Rating of 42 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Further, Uber stock’s Relative Strength Rating score was 45 out of a best-possible 99. The score puts Uber’s 12-month performance in the bottom half of all stocks tracked by IBD.
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