First quarter earnings for Uber are coming later this week. That could provide a chance for the ride-hail leader to regain momentum that has waned in recent weeks. Uber stock analysts are mostly positive on the tech giant heading into the report.
Uber stock gained nearly 150% in 2023 and got off to a strong start in the first months of 2024. But shares have mostly traded sideways since a jump on Feb. 14. That's when Uber announced plans for its first-ever buyback. Since Feb. 15, Uber stock is down about 10%.
"This pullback has come as investors feel less confident in upward revisions," Morgan Stanley analysts led by Brian Nowak wrote in a client note Monday. Meanwhile, "Fears around Robotaxi and autonomous driving disruption have re-emerged following the release of Tesla's new autonomous capabilities and announcement of its Robotaxi event on August 8th."
Uber Earnings Preview: Autonomous Debate
Uber plans to release earnings before the market opens on Wednesday. On average, analysts expect earnings to swing to a profit of 22 cents per share from an 8-cent per share loss the same period a year earlier. Analysts expect revenue to rise 14% to $10.1 billion.
Morgan Stanley analysts reiterated a positive overweight rating for Uber on Monday, with a price target of 90. Survey data "shows there is ample growth runway and Uber's multi-product rides and cross-platform strategies are set to drive adoption, frequency and profitable growth."
Uber stock, as well as that of rival Lyft, took a hit last month after Elon Musk touted Tesla's plan for robotaxis. But Nowak wrote Monday that autonomous driving adoption will have a "multiyear" adoption curve from both tech and regulatory challenges.
"Furthermore, we see autonomous as a potential bull case for Uber, given its leading consumer position within shared rides," Morgan Stanley said. The analysts added that Uber's "leading driver network (to service nonautonomous rides) and autonomous partnerships (Waymo and Motional) (are) enabling it to drive further consumer adoption."
Uber Earnings Preview: Numbers To Watch
Evercore ISI analyst Mark Mahaney is also bullish on Uber heading into the report. "We view Street Q1 Bookings and EBITDA estimates as achievable with room for some potential upside," Mahaney wrote. EBITDA is earnings before interest, taxes, depreciation and amortization.
Analysts on average project Uber's gross bookings will increase 20.7% year over year to $37.9 billion. Gross bookings are the total dollar value of fares charged for transportation, food delivery and other services.
Analysts also expect the rides business to grow 28.2% year over year to $19.2 billion in bookings for the first quarter. Bookings for the Uber Eats food delivery business are expected to rise 16.7% to $17.5 billion, according to analyst consensus gathered by FactSet.
Mahaney added that strong Q1 delivery demand for DoorDash, as the company reported last week, provides a positive read-through for Uber stock.
Another report to watch: Uber's closest rival in the ride-hail market, Lyft, is expected to report its first quarter earning late Tuesday.
Uber Stock: Strong Composite Score
Uber stock still holds a best-possible IBD Composite Rating of 93 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one. The best growth stocks have a Composite Rating of 90 or better.
Uber stock's Relative Strength Rating score is at 92 out of a best-possible 99, indicating it is significantly outperforming the market.
