Uber stock price has remained in a technical bear market after falling by over 22% from its highest point in 2024. This retreat happened as concerns about its growth trajectory and the substantial competition. The stock was trading at $67.30 on Monday as focus shifted to the upcoming earnings. So, will it rise or fall after the numbers?
Uber earnings preview
Uber, the biggest ride-hailing company in the world, has been one of the best performers over the years. Its annual revenue has jumped from $13 billion in 2019 to over $41 billion in the trailing twelve months.
Uber’s business has grown even as competition in the industry has intensified, with its top competitors being firms like Lyft and Bolt.
The company’s performance has been helped by its brand popularity in the US and around the world. It has also expanded into the grocery and food delivery business.
The most recent financial results showed that Uber’s gross bookings continued growing in the third quarter. Its bookings rose by 16% to $40.97 billion. While that was a good number, it was also a sign that it was moving in the wrong direction since it grew by 21% in the same quarter a year earlier.
Uber’s revenue jumped by 20% in Q3 to $11.1 billion, while its adjusted EBITDA grew by 55% to $1.6 billion. The EBITDA growth was also lower than the 112% it experienced in the same quarter a year earlier
Analysts expect Uber’s business will continue doing well in the year’s final quarter. The average estimate is that its revenue rose by 18.5% in Q4 to $11.7 billion, bringing the annual revenue figure to $43.73 billion, a 17% YoY increase. Uber is then expected to make $50.2 billion this year, a 15% increase.
Read more: Uber stock gains on AV partnership with Nvidia: here’s what investors should know
Uber is now profitable
Most importantly, the company has become profitable. Its annual earnings-per-share (EPS) is expected to be $1.89, up from 87 cents in 2023. The profit will then move to $2.33 this year, which is a good number for a firm that made substantial losses.
Uber is using some of its profits to reward its shareholders. In January, the management announced that it had entered into an accelerated share repurchase program worth $1.5 billion as part of its $7 billion program. The management said:
“Our stock is undervalued relative to the strength of our business, and we plan to accelerate our buybacks under the existing authorization as a result. This ASR represents a value-enhancing deployment of capital, retiring over one percent of our market cap.”
Uber has a market cap of $140 billion and a forward Non-GAAP PE multiple of 24.2. This PE ratio means that it is relatively undervalued since the S&P 500 index has a multiple of about 21. Uber’s forward price/cash flow is 21.50. Analysts’ average Uber stock price forecast is $88.6, up from the current $67.30.
Uber stock price analysis
UBER stock by TradingView
The daily chart shows that the UBER share price has remained in a tight range in the past few weeks. It is now consolidating at the 50-day and 100-day Exponential Moving Averages (EMA).
There are signs that it has formed an inverse head and shoulders chart pattern, a popular bullish reversal sign. It is also trading at the 23.6% Fibonacci Retracement level.
Therefore, the stock will likely have a strong bullish breakout after earnings. If this happens, the next point to watch will be at $82. A drop below the support at $60 will invalidate the bullish view.
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