IBD 50 growth stock Uber has gained 74% so far this year, and its chart suggests another run is in store.
The stock just formed a three-weeks-tight pattern with a buy point of 45.24.
Uber's sales growth, though still strong, has tapered off over the past three quarters and losses are narrowing. For the first quarter, sales of $8.8 billion grew 29% while a loss of 8 cents per share was an impressive improvement from the $3.03 per-share loss a year ago.
That followed a slowing in sales growth from 136%, to 105%, 72% and 49%. But losses have narrowed and the company posted a profit for the fourth quarter, according to MarketSmith.
Shares broke out of a cup base with a buy point of 37.58 in early May, after first-quarter earnings beat views and the company cited strong bookings.
First-quarter gross bookings grew 19% from the previous year to $31.4 billion. For the second quarter, the company expects bookings between $33 billion and $34 billion.
Uber Expected To Turn Profitable In 2023
Analysts polled by FactSet see losses tapering further to 1 cent per share on sales of $9.4 billion in the second quarter. Second-quarter earnings are due on Aug. 10.
In the third and fourth quarters, analysts see earnings of 2 cents and 9 cents on sales of $9.5 billion and $10 billion, respectively.
In fact, analysts expect Uber to have its first annual profit this year. And Wall Street estimates 119% earnings growth in 2024, according to FactSet.
The company runs three business segments: mobility with the well-known Uber ride operations; delivery that includes grocery and food delivery; and freight that handles shipping and logistics. Uber has also entered into a new electric truck partnership with WattEV and CHEP with routes in Southern California.
Q1 mobility bookings grew 43% from the previous year while delivery grew 12%, but freight declined 23% over the same period.
In April, the company sold its equity position in Yandex.taxi and exited operations in Russia as a result. Uber sold its stake for $702.5 million to Yandex, which operates a search engine in Russia and other countries.
Growth Stock Has Mixed Ratings
Uber's Composite Rating is 89, which is just below the 90 or higher found in most market leaders. Its Relative Strength Rating of 96 is better. The EPS Rating, however, is 42 due to the multiple years of losses.
More funds have been buying the stock over the past four quarters — nearly 2,000 as of June. Of the total shares outstanding, funds own 46% of Uber stock.
Uber is in the leisure and services group, which holds 33rd place among IBD's 197 industry groups.
JPMorgan Large Cap Growth Fund and the Franklin Growth Fund hold shares of the growth stock. Exchange traded funds owning it include iShares U.S. Transportation ETF and the First Trust U.S. Equity Opportunities ETF.
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