Uber Earnings Miss Sends Stock Spiraling

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

Uber Technologies (UBER) stock is down nearly 9% midday in Wednesday's trading session after the ride-hailing firm reported an unexpected loss in its first quarter.

In the three months ended March 31, Uber's revenue increased 14.8% year-over-year to $10.1 billion, driven by a 19.9% rise in gross bookings to $37.7 billion. Its net loss widened to $654 million, or 32 cents per share, from $157 million, or 8 cents per share, in the year-ago period. The company noted that its net loss included "a $721 million net headwind (pre-tax) due to net unrealized losses related to the revaluation of Uber's equity investments."

"Our results this quarter once again demonstrate our ability to deliver consistent, profitable growth at scale,” Uber CEO Dara Khosrowshahi said in a statement. "More than 7 million people now choose to earn flexibly on Uber every month, with driver earnings of $16.6 billion continuing to grow faster than our topline."

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just ~~$107.88~~ $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

https://cdn.mos.cms.futurecdn.net/flexiimages/y99mlvgqmn1763972420.png

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

The results were mixed compared with analysts' expectations, which had called for revenue of $10.1 billion and earnings of 23 cents per share, according to CNBC.

For the second quarter, Uber said it expects gross bookings in the range of $38.75 billion to $40.25 billion and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) in the range of $1.45 billion to $1.53 billion.

The Q2 outlook is inline with Wall Street's expectations, which calls for gross bookings of $40 billion and adjusted EBITDA of $1.49 billion.

"Demand for Uber remains robust across our platform, supported by our improving marketplace experience, the continued shift of consumer spending from goods to services, and the secular trend towards on-demand transportation and delivery," Khosrowshahi said in prepared remarks.

What is the prediction for Uber stock?

Wall Street is bullish on the tech stock, which joined the S&P 500 last December. According to S&P Global Market Intelligence, analysts' average target price for Uber is $86.92, representing implied upside of over 35% to current levels. Additionally, the consensus recommendation is a Strong Buy.

Jefferies is one of those with a bullish outlook on Uber stock. The financial services firm has a Buy rating and $103 price target on UBER, representing implied upside of more than 59% to current levels.

In an April note raising its price target to $100 from $95, Jefferies said, "UBER is increasingly leveraging an expanded Mobility product suite to address more use cases, which is driving increased user adoption and multi-product attachment."

More recently, Jefferies lifted its target price on May 7 to $103 from $100 on optimism surrounding Uber's recently announced partnership with grocery delivery firm Instacart (CART).

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.