Uber Stock Set For Biggest Loss In Months—Despite First-Ever Profitable Quarter - Forbes

Topline

Uber posted a positive operative income for the first time in its history last quarter, but its share price flailed in early Tuesday trading as concerns about slowing sales outweighed investor optimism for the long bleeding business.

Key Facts

The ride-hailing and food delivery firm made $326 million in operating income during the three-month period ending June 30, the first time it turned a profit since such data became available nine years ago in 2014.

Uber’s quarterly free cash flow of $1.1 billion was also the best in its history.

Shares of the company rallied as much as 4% in pre-market trading to over $50, which would have been its highest price since July 7, 2021.

But the stock quickly turned negative after the market opened, sliding as much as 6%, which would have been its worst day since October 11, 2022, before recovering to a milder 4% loss which is its steepest since March.

Despite the record profit, Uber’s $9.2 billion in revenue came short of consensus estimates, while its 14% year-over-year revenue growth was its weakest since Q1 2021.

Even after its roughly 100% surge over the past year, Uber stock is still down roughly 20% from its early 2021 peak.

Big Number

$31.5 billion. That’s how much Uber lost from 2014 through Q1 2023, the Financial Times noted Tuesday.

Contra

Uber showed Tuesday it’s able to “efficiently run the broader business and drive positive results,” William Blair analyst Ralph Schackart wrote in a note to clients. Schackart added that the results “confirm management’s ability to successfully track toward its longer-term targets” laid out last year, when Uber brass set a target of $5 billion in adjusted earnings before interest, depreciation and amortization for 2024, nearly 300% growth from its $1.7 billion adjusted EBITDA last year.

What To Watch For

Ride-hailing competitor Lyft reports earnings Monday, while DoorDash, Uber’s most notable rival in food delivery, will report Wednesday. Lyft shares are down roughly 80% over the last two years while DoorDash shares have sank about 50%, far underperforming Uber’s 15% gain during the period. Analysts project both DoorDash and Lyft to report nearly $200 million operating losses, according to FactSet data.