Uber Technologies (UBER) stock fell out of the gate Wednesday after the ride-hailing company beat top- and bottom-line expectations for its fourth quarter but issued a weaker-than-expected gross bookings outlook for its first quarter.
In the three months ending December 31, Uber's revenue increased 20.4% year over year to $12 billion, driven by a 17.6% increase in gross bookings to $44.2 billion. Its earnings per share (EPS) rose nearly fourfold from the year-ago period to $3.21, largely due to a tax valuation release.
"Uber ended 2024 with our strongest quarter ever, as growth accelerated across MAPCs [Monthly Active Platform Consumers], trips, and Gross Bookings," said CEO Dara Khosrowshahi in a statement. "Our performance has been powered by rapid innovation and execution across multiple priorities, including the massive opportunity presented by autonomous vehicles."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
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.
Khosrowshahi added that Uber entered the new year with "clear momentum" and that the company "will continue to be relentless against our long-term strategy."
"Record demand in both Mobility and Delivery helped us grow Gross Bookings faster than the high end of our guidance, and we closed out 2024 exceeding our three-year outlook for Gross Bookings, Adjusted EBITDA [earnings before interest, taxes, depreciation and amortization], and free cash flow," said Uber Chief Financial Officer Prashanth Mahendra-Rajah in a statement.
Uber's fourth-quarter results beat analysts' expectations. Wall Street was anticipating revenue of $11.8 billion, gross bookings of $43.5 billion and earnings of 50 cents per share, according to CNBC.
However, sentiment turned negative toward Uber stock when it provided its outlook. For the first quarter, Uber said it expects to achieve gross bookings in the range of $42 billion to $43.5 billion, representing growth of 17% to 21% from the year-ago period. The midpoint of this range, $42.75 billion, came up short of the $43.5 billion in gross bookings Wall Street is calling for.
Is Uber stock a buy, sell or hold?
Uber Technologies has lagged the broad market over the past 12 months, down roughly 6% vs the S&P 500's 21% gain. Yet, Wall Street is keeping the faith on the industrial stock.
According to S&P Global Market Intelligence, the average analyst target price for UBER stock is $88.63, representing implied upside of nearly 30% to current levels. Additionally, the consensus recommendation is a Buy.
Financial services firm Jefferies is one of those with a Buy rating on the large-cap stock along with an $87 price target.
Jefferies analyst John Colantuoni admits there is "skepticism that UBER can deliver on the three-year outlook." However, he notes that the company "is keeping Bookings growth elevated by increasingly leveraging non-core products [Uber Freight, Uber for Business, for example] that address more use cases to drive user adoption and multi-product attachment."
Related Content
-
What You Learn Becoming Your Mother's Financial CaregiverWriter and certified financial planner Beth Pinsker talks to Kiplinger about caring for her mother and her new book.
-
I want to help pay for my grandkids' college. Should I make a lump-sum 529 plan contribution or spread funds out evenly through the years?We asked a college savings professional and a financial planning expert for their advice.
-
Seven Moves for High-Net-Worth People to Make Before End of 2025, From a Financial PlannerIt's time to focus on how they can potentially reduce their taxes, align their finances with family goals and build their financial confidence for the new year.
-
I'm a Financial Planner: These Are the Seven Tiers of Retirement Well-BeingLet's apply Maslow's hierarchy of needs to financial planning to create a guide for ranking financial priorities.
-
Why More Americans Are Redefining Retirement, Just Like I DidRetirement readiness requires more than just money. You have a lot of decisions to make about what kind of life you want to live and how to make it happen.
-
3 Major Changes Investors Must Prepare for in 2026A possible stock market bubble. Trump accounts. Tokenized stocks. These are just three developments investors need to be aware of in the coming months.
-
A Compelling Case for Why Property Investing Reigns Supreme, From a Real Estate Investing ProInvestment data show real estate's superior risk-adjusted returns and unprecedented tax advantages through strategies like 1031 exchanges and opportunity zones.
-
Stocks Close Out Strong Month With Solid Amazon Earnings: Stock Market TodayAmazon lifted its spending forecast as its artificial intelligence (AI) initiatives create "a massive opportunity."
-
Are You Retired? Here's How to Drop the Guilt and Spend Your Nest EggTransitioning from a lifetime of diligent saving to enjoying your wealth in retirement tends to be riddled with guilt, but it doesn't have to be that way.
-
Government Shutdown Freezes National Flood Insurance Program: What Homeowners and Buyers Need to KnowFEMA's National Flood Insurance Program is unavailable for new customers, increased coverage or renewals during the government shutdown.
