Uber Rides Year of Efficiency Higher, But Can It Sustain Momentum in Q2 Earnings?
Few companies on Wall Street have been able to grasp this year’s moat better than the ride-hailing giant Uber Technologies (NYSE:UBER).
On the one side, the San Francisco-based company has greatly benefited from the resurgence of high-flying tech stocks as investors anticipate more dovish financial conditions in the near turn, favoring companies that are yet to turn a full-year profit.
On the other hand — and perhaps most importantly — Uber has been absolutely killing it in what Zuckerberg named the ‘year of efficiency.’
Not only has the company posted its two best earnings reports since going public, beating analysts’ earnings per share estimates by a lofty 1.570% in Q4 2022 and 100% in Q1 2023, but it also did so by cutting expenses, growing revenues, and improving EBITDA margins at a time when labor costs rose sharply and the threat of regulation for drivers around the world weighed on legal spending.
After a difficult pandemic — which led the company to postpone its plans for a fully profitable year — this year’s combination of factors has propelled the ride-hailing giant to its 52-week high with a nearly 100% rise in prices. Long term, however, the company still sits nearly 25% below its ATH of $64.05.
InvestingPro’s fair value estimate indicates that Uber still has a 5.1% upside potential in the next 12 months with medium uncertainty.
Source: InvestingPro
On the macro side, the market has broadened its YTD rally toward more sectors, suggesting a broader correction may be nearing from seemingly overbought stocks.
With valuation looking stretched from a short-term perspective but with earnings trending higher, the bull vs. bear discussion for Uber stock grows increasingly disputed.
Let’s take a deeper dive
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