Is Uber Stock a Buy, Hold or Sell After Earnings?

car driver looking at Uber app on smartphone — (Image credit: Rafael Henrique/SOPA Images/LightRocket via Getty Images)

Uber Technologies (UBER) is one of the worst S&P 500 stocks in Thursday's session after the ride-hailing company beat top- and bottom-line expectations for its third quarter, but came up just short on another key metric.

In the three months ended September 30, Uber said its revenue increased 20.4% year over year to $11.2 billion, driven by a 16.1% rise in gross bookings to $41 billion. Its earnings per share (EPS) improved to $1.20 from 10 cents in the year-ago period.

"We delivered yet another record quarter of profitable growth at a global scale, reflecting the strength of our platform, which now has over 25 million Uber One members," said Uber CEO Dara Khosrowshahi in a statement. "We continue to build with an eye towards the future, optimizing our products for new customer segments and geographies, introducing Rider Verification nationwide to increase safety for drivers, and launching shuttles to airports and venues."

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The headline results topped analysts' expectations. Wall Street was anticipating revenue of $10.98 billion and earnings of 41 cents per share, according to CNBC. However, gross bookings came in just shy of expectations for $41.25 billion.

For its fourth quarter, Uber said it expects to achieve gross bookings in the range of $42.75 billion to $44.25 billion, representing growth of 16% to 20% from the year-ago period. However, the midpoint of this range, $43.5 billion, came up just shy of the $43.7 billion in gross bookings Wall Street anticipates.

Is UBER stock a buy, sell or hold?

Heading into today's trading, Uber Technologies was up 29% for the year to date and Wall Street was targeting even more upside for the industrial stock.

According to S&P Global Market Intelligence, the average analyst target price for UBER stock is $88.86, representing implied upside of nearly 12% to its October 30 close. Additionally, the consensus recommendation is a Buy.

Financial services firm Wedbush is one of those with an Outperform rating (equivalent to a Buy) and a $86 price target on the large-cap stock.

"While we expect the debate related to autonomous vehicles will limit near-term upside for shares, we think management has alleviated some investor concerns in recent months through new and expanded partnerships with leading autonomous-vehicle providers," said Wedbush analyst Scott Devitt in an October 29 note.

These include strategic deals with AV leaders including WeRide and Cruise, but the most notable is a deepened partnership with Waymo that will make its autonomous vehicles available on the Uber app in early 2025, he adds.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.