Uber’s Unstoppable Drive: 74% Surge and Expectations of a 119% Earnings Boost by 2024

It’s been a buoyant journey for Uber shares recently, recording an impressive 74% run, and if forecasts hold, this ride is far from over. Encouragingly, Uber’s 2024 earnings are projected to soar by a staggering 119%. Let’s delve into the factors steering this potentially profitable course.

In early May, the shares made a notable escape from a cup base, cruising past a buy point of 37.58, buoyed by first-quarter earnings that exceeded expectations and robust bookings. The gross bookings in Q1 showed an impressive 19% year-on-year growth, amounting to $31.4 billion. Looking ahead, Uber is setting the bar even higher for Q2, anticipating bookings in the range of $33 billion to $34 billion.

Uber’s Journey towards Profitability

According to analysts from FactSet, the ride-hailing giant is expected to significantly reduce its losses to a mere 1 cent per share on sales of $9.4 billion in Q2. The much-awaited second-quarter earnings are due for release on August 10. As we move forward into the latter half of the year, projections for Q3 and Q4 earnings show figures of 2 cents and 9 cents on sales of $9.5 billion and $10 billion respectively. Moreover, the market anticipates Uber to celebrate its maiden annual profit this year, and a staggering 119% earnings growth is forecasted by 2024, according to Wall Street estimates.

Diverse Business Segments and New Partnerships

Uber’s business operations span three key segments: mobility, which includes its flagship ride operations; delivery, encompassing grocery and food delivery; and freight, responsible for shipping and logistics. The company has recently ventured into an exciting partnership with WattEV and CHEP for electric truck routes in Southern California. In terms of segment growth, Q1 mobility bookings saw a 43% jump year-on-year, and delivery grew by 12%. However, freight recorded a 23% decline over the same period.

Exiting Russia and Mixed Ratings

April witnessed Uber parting ways with its equity position in Yandex.taxi, leading to its exit from Russian operations. The stake was sold for $702.5 million to Yandex, a prominent search engine operator in Russia and other regions. Despite its steady performance, Uber’s Composite Rating sits at 89, slightly below the 90 or higher generally associated with market leaders. On a positive note, its Relative Strength Rating boasts a healthier score of 96. The EPS Rating, however, lingers at 42 due to successive years of losses.

Growing Investor Confidence and Market Position

Over the past four quarters, nearly 2,000 funds have purchased the stock, now owning 46% of the total Uber shares outstanding. This growing confidence underscores the firm’s promising outlook. Uber operates within the leisure and services group, which currently ranks 33rd among IBD’s 197 industry groups. It’s also found a place in the portfolios of JPMorgan Large Cap Growth Fund (OLGAX) and the Franklin Growth Fund (FKGRX). Additionally, ETFs such as the iShares U.S. Transportation ETF (IYT) and the First Trust U.S. Equity Opportunities ETF (FPX) have also invested in Uber. As Uber rides the wave of optimism and navigates towards profitability, it’s clear that the journey ahead is teeming with exciting possibilities. The market eagerly awaits to see how this narrative unfolds in the coming quarters.

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