Shares of cab ordering service Uber fell nearly 7% despite a strong third-quarter earnings report. Investors were likely disappointed that operating profit after deducting one-time tax and investment incentives fell short of estimates. Still, 80% of analysts on Wall Street advise buying Uber stock, which is up 65% YTD.
What Uber said in the report
- Uber's operating profit, excluding tax and investment benefits, was $1.1 billion. Analysts had forecast $1.6 billion. Pressure on profits came from a significant increase in general and administrative expenses, Barron's explains.
- Revenue reached $13.5 billion, up 19% year-on-year in constant currency terms. Revenue was also above expectations, with the Wall Street consensus forecast at $13.3 bln.
- Earnings per share (EPS) came in at $1.2 - well above the consensus estimate of $0.69 quoted by Barron's. The company's net income amounted to $6.6 billion, but this figure included a tax benefit of $4.9 billion from the tax valuation release and $1.5 billion of pre-tax profit from the revaluation of the company's stakes in other projects, Uber said in a press release.
- Total bookings (Gross Bookings) rose to $49.7 billion, exceeding forecasts thanks to better results in both the transportation segment and the Uber Eats food delivery service. The number of monthly active users of the platform grew 17% to 189 million, and the total number of rides reached 3.5 billion, up 22% from a year earlier.
- For the fourth quarter, Uber expects order volume (Gross Bookings) in the range of $52.25 billion to $53.75 billion, slightly above the Wall Street consensus forecast, Yahoo Finance writes.
What the analysts are saying
Even though Uber stock is up 65% this year, 80% of analysts still advise buying it. The remaining 20% are neutral. The average target price implies the potential growth of the company's securities by 10%, and the highest target implies growth of 50%.
This article was AI-translated and verified by a human editor
