Uber Technologies, Inc. (NYSE: $UBER) is a transportation company that offers a ride-hailing service via an app, allowing passengers to hail drivers at a fee. Drivers using Uber services work as independent contractors.
On Wednesday, 08 May 2024, Uber released its first quarter fiscal 2024 results to a negative market reaction.
Uber Reports Disappointing Q1 Results
In the first quarter, Uber reported revenue of $10.1 billion, a 15% increase from the same quarter last year, in line with estimates of $10.11 billion. The company recorded a $654 million net loss, far worse than the expected net income of $503.10 million.
Gross Bookings increased 21% Y/Y on an FX-neutral basis to $37.7 billion, driven by a 26% Y/Y increase in Mobility Gross Bookings to $18.7 billion, and 17% Y/Y increase in Delivery Gross Bookings to $17.7 billion. Uber reported a 21% Y/Y increase in trips for the quarter to an average of around 28 million daily trips.
Uber reported an 82% Y/Y increase in adjusted EBITDA to $1.4 billion for a margin of 3.7%, up from 2.4% in Q123. Its Q124 income from operations came in at $172 million, a $434 million Y/Y increase, and down $480 million quarter-over-quarter.
Uber attributed the huge sequential decline in operating income to “discrete legal and regulatory reserve changes and settlements.” It added that it was “resolving several legacy matters.”
Net cash from operations came in at $1.4 billion, while free cash flow was $1.4 billion. It ended the quarter with $5.8 billion in cash and cash equivalents.
Uber Issues Second Quarter Guidance
For the second quarter of fiscal 2024, Uber expects $38.75B – $40.25B in Gross Bookings, an 18% – 25% Y/Y increase on an FX-neutral basis, below estimates of $40.04 billion at the midpoint. It expects an adjusted EBITDA of $1.45B – $1.53B, a 58% – 67% Y/Y increase.
Uber Stock Performance
Following the huge miss in net income and weak Q2 forecast, Uber stock plunged 6.09% to $66.14 as of 12:07 PM EDT. Its Q1 results and second quarter forecast signal that growth could be slowing down after stellar performance in fiscal 2023, which saw its delivery segment post its first full-year profit.
Following the release of the Q1 results, Uber stock is up 13.53% this year and 70.69% in the past 52 weeks compared to the 25.38% gain of the SPX and is trading at a 19.47% discount to its 52-week high of $82.14. The stock is below its 50 DMA of $75.06 and above its 200 DMA of $59.36.
Analysts’ Outlook on UBER
According to 36 stock analysts, Uber has an overall strong buy rating. They forecast a wide range for the stock, with a high of $103 and a low of $78. Their average forecast of $89.44 is a 34.37% upside based on the most recent price.
Should You Buy UBER in 2024?
Uber’s mixed first-quarter results come amid stellar results from competitor Lyft on Tuesday, May 7, 2024. Lyft also issued an upbeat forecast for Q2, stating that it had experienced increased demand for ride-sharing services. Since joining the company in April 2023, Lyft CEO David Risher has been working to take market share from Uber in Canada and the US.
The increased competition from Lyft and the downbeat guidance could signal headwinds for Uber’s future performance. However, given its massive market share and experience in the ride-sharing industry, it could potentially emerge unscathed in the long term. Consequently, the strong buy rating accurately represents the stock’s performance in the medium term.
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