Uber’s Earnings: Autonomous driving and Stock Buybacks in Focus
Ride-Sharing Giant Set to Announce Quarterly Results
Uber Technologies Inc. (UBER), a dominant force in the ride-sharing industry, is poised to release its quarterly earnings report Wednesday before the market opens. The company’s recent performance has been remarkable, consistently surpassing earnings-per-share (EPS) estimates by over 100% in the past two quarters.
- Analysts anticipate an EPS of $0.70 on $11.61 billion in revenue.
- The options market indicates a potential 7% stock price fluctuation this week.
- Uber’s focus on autonomous driving technology may be fueling its stock rally, even amidst broader market volatility.
Stock Performance and Market Sentiment
While the broader stock market experienced a downturn in April, Uber’s stock defied the trend, surging from a low of $60.63 to $86.57. currently trading around $86,the stock is just shy of its all-time high of $87,reached in October 2024.
Pro Tip
Keep an eye on pre-market trading activity for early indications of market reaction to the earnings release. Significant price movements before the official open can signal the overall sentiment.
The Autonomous Revolution and Uber’s Strategy
The rise of Uber and Lyft has fundamentally reshaped transportation.The focus has shifted to autonomous vehicles, with manufacturers vying to partner with ride-sharing companies. uber CEO Dara Khosrowshahi highlighted the importance of this technology in the company’s long-term strategy.
Uber ended 2024 with our strongest quarter ever, as growth accelerated across MAPCs, trips, and Gross Bookings. Our performance has been powered by rapid innovation and execution across multiple priorities, including the massive possibility presented by autonomous vehicles. We enter 2025 with clear momentum and will continue to be relentless against our long-term strategy.
Dara Khosrowshahi, Uber CEO
Financial Outlook and Potential Stock Buybacks
Uber’s chief financial officer, prashanth Mahendra-Rajah, expressed strong confidence in the company’s financial health, even hinting at potential stock buybacks in the future.
Record demand in both mobility and delivery helped us grow gross bookings faster than the high end of our guidance for gross bookings, adjusted EBITDA and free cash flow … We believe we remain undervalued despite these strong fundamentals and plan to be active and opportunistic buyers of our stock.
Prashanth Mahendra-Rajah, Uber chief financial officer
Uber’s business model may be somewhat recession-resistant, as it offers a cost-effective transportation alternative compared to owning and maintaining a personal vehicle.
options Market and Implied Volatility
The options market reflects high implied volatility for Uber’s earnings call, projecting a potential stock price move of +/- $6.32 through Friday, representing approximately 7% of the stock’s notional value. Looking ahead to the July options cycle, the implied stock price range is +/- $11.89, indicating that the market is placing significant weight on this earnings declaration.
Did You Know?
Implied volatility is a key indicator of market sentiment. Higher implied volatility suggests greater uncertainty and potential for significant price swings.
Bullish and Bearish Scenarios
Investors with a bullish outlook on Uber are anticipating another strong performance, with EPS and revenue exceeding expectations. Any insights into the timeline for autonomous vehicles could further boost investor confidence. Conversely,bearish investors are bracing for a potential miss on EPS or revenue,which could lead to a stock retreat.
