Uber Stock Pops After Solid Earnings: What to Know

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

Uber Technologies (UBER) stock is higher Tuesday after the ride-hailing company beat top- and bottom-line expectations for its second quarter.

In the three months ended June 30, Uber said its revenue increased 16% year-over-year to $10.7 billion, driven by nearly 19% growth in gross bookings to $40 billion. Its earnings per share (EPS) improved to 47 cents from 18 cents in the year-ago period.

"Uber's growth engine continues to hum, delivering our sixth consecutive quarter of trip growth above 20 percent, alongside record profitability," said Uber CEO Dara Khosrowshahi in a statement. "The Uber consumer has never been stronger – more people are using the platform, and more frequently, than ever before – while drivers and couriers earned a new all-time high of $17.9 billion over the quarter."

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The results easily topped analysts' expectations. Wall Street was anticipating revenue of $10.6 billion and earnings of 31 cents per share, according to CNBC.

For the third quarter, Uber said it anticipates gross bookings in the range of $40.25 billion to $41.75 billion, representing year-over-year growth of 18% to 23%. However, the midpoint of this range, $41 billion, came up just short of analysts' forecasts for gross bookings of $41.2 billion.

Is Uber stock a buy, sell or hold?

Uber Technologies has lagged the broad market this year, up 2.4% on a price return basis vs the S&P 500's 9.9% gain. Still, it's one of analysts' top-rated stocks.

According to S&P Global Market Intelligence, the average analyst target price for the tech stock is $86.76, representing implied upside of nearly 40% to current levels. Additionally, the consensus recommendation is a Strong Buy.

BofA Securities is one of those with a bullish outlook on Uber stock.

"Uber should benefit from secular shifts to the sharing economy (Mobility), time-saving services (Delivery), and a move to more efficient marketplaces (Freight)," said BofA analyst Justin Post in a July 31 note. "We are constructive on fundamentals given a large total addressable market (TAM) and technology advances that likely lower driver dependency and improve margins. We think the stock should trade at a premium to direct peers given share leadership and potential network effects."

Post has a Buy rating and an $87 price target on Uber Technologies.

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.