Uber Stock Dips Despite Strong Q3 Earnings Amid Weak EBITDA Guidance
Shares of Uber Technologies (UBER) experienced a 4% decline in pre-market trading due to cautious guidance for the upcoming quarter, overshadowing positive third-quarter earnings. Despite this setback, the company reported significant growth in both earnings and revenue.
Strong Q3 Earnings Exceed Expectations
In the third quarter, Uber recorded earnings per share (EPS) of $3.11, markedly exceeding analysts’ predictions of $0.69. Additionally, the company’s revenue grew by 19% year-over-year, reaching $13.47 billion, surpassing the anticipated $13.26 billion.
Guidance for Q4 Shows Mixed Signals
Looking ahead, Uber provided guidance for gross bookings between $52.25 billion and $53.75 billion, aligning closely with market forecasts of $52.33 billion. However, the company anticipates adjusted EBITDA to fall between $2.41 billion and $2.51 billion, with the midpoint slightly below the expected $2.49 billion from analysts.
Growth Driven by Increased Demand
Uber’s robust growth can be attributed to heightened demand for rides and deliveries, partially fueled by students returning to school and renewed office attendance. The company reported a 22% annual increase in trips, totaling 3.5 billion, and a 21% rise in gross bookings, reaching $49.7 billion for Q3.
Uber One Membership Program Boosts Demand
Uber’s membership scheme, Uber One, also contributed to increased demand during the quarter, encouraging higher purchasing of rides as well as food and grocery deliveries. Khosrowshahi highlighted the growing potential of Uber’s services beyond traditional ride-hailing.
- Q3 delivery segment sales grew by 29%
- Mobility revenue increased by 20%
- Freight division performance remained flat
Market Outlook for UBER Stock
According to TipRanks, UBER stock is rated as a Strong Buy based on 27 Buy ratings and 4 Hold ratings. The current average price target for Uber’s stock stands at $110.61, suggesting a potential upside of approximately 10.92% from current prices. Future analyst coverage updates may alter these ratings and forecasts.
