UBER released its latest earnings, and the recent stock rally is at a key level for the ride-hailing app firm.
UBER shares have surged from their lows near $40 and go into the earnings looking for a break of the resistance near $50. That could see a further rally if the stubborn resistance gives way.
The company is a favourite of analysts ahead of third-quarter earnings, and consensus estimates for UBER’s revenue is around $9.47 billion, indicating 13.5% growth year over year. The top line is likely to have been boosted by strength in the delivery business and improvement in the Mobility business.
However, high sales and marketing expenses and costs associated with paying incentives to drivers in some countries are likely to have affected Uber’s bottom line in the third quarter.
KeyBanc Capital Markets analysts upgraded Uber to Overweight with a price target of $60. The analysts also lifted their earnings and revenue estimates for 2024 and 2025, adding that they expect third-quarter results to be “largely in line.”
KeyBanc wrote:
“Uber is positioned to benefit from the sector growth of retail media with its emerging advertising business, which is margin accretive. Additionally, we continue to see opportunities for Uber to expand within its existing verticals into areas like hailing, shared rides, and grocery delivery.”
Oppenheimer analysts maintained an Outperform rating and a $65 price target. They see an “attractive entry point” amid a recent stock decline and ahead of a potential inclusion in the S&P 500 should Uber achieve GAAP profitability and noted consumer tailwinds.
An overwhelming majority of analysts are bullish on the stock, with 96% rating it a Buy, according to data from Factset.
That should see a strong move in the stock if it outperforms, to the upside or downside, with the $50 price level being a barrier to further gains.