Uber Technologies reported stronger-than-expected earnings and sales, with the ride-hail company touting accelerating demand. But Uber stock fell as currency headwinds from a strong dollar pushed its guidance for bookings growth below expectations.
Uber said early Wednesday that it earned $3.21 per share on sales of $11.96 billion for the December-ended quarter. That beat expectations for earnings of 50 cents and sales of $11.76 billion, according to FactSet. For the same period a year earlier, Uber posted earnings of 66 cents per share on sales of $9.94 billion.
The big earnings beat was driven by a large tax valuation release and unrealized gain on equity investments. Uber's operating income was $770 million, below estimates of $1.15 billion.
Further, Uber's outlook for the current quarter missed expectations. Uber guided for gross bookings of $42.75 billion at the midpoint of its range. That was below analyst expectations of $43.49 billion. Uber cited a "5.5 percentage point currency headwind to total reported YoY (year-over-year) growth."
On the stock market today, Uber stock fell more than 7% at close at 64.48. Uber stock gained 3.6% Tuesday to close above its 200-day moving average for the first time since early December.
Uber Leader Says Business Accelerating
On a call with analysts early Wednesday, Uber Chief Executive Dara Khosrowshahi said "acceleration" was the theme of the Q4 for Uber.
"We accelerated growth in audience, trips and the top line," he said. "Gross bookings growth on a constant currency basis beat even our own expectations, coming in above the high-end of our guidance."
Uber's total Q4 bookings grew 21% to $44.2 billion, ahead of expectations of $43.48 billion, according to FactSet.
Khosrowshahi also shared that Uber added 5 millions new subscriber for its Uber One membership program. Uber One has grown to 30 million members as of the end of the year, up 60%.
Uber's adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $1.84 billion for the quarter, matching analyst expectations.
Analysts pinned the stock's decline on the company's first-quarter guidance.
"Shares are down pre-market, reflecting slower expectations for bookings growth in 1Q due to FX headwinds and adjusted EBITDA guidance that likely did not clear investor expectations, despite being in line with consensus at the midpoint of the guide," Wedbush analyst Scott Devitt wrote to clients. "Still, we view the recent dislocation in shares as unwarranted for a company demonstrating strong fundamentals, with top-line growth in the mid-teens and adjusted EBITDA set to grow over +30% Y/Y in each of the next two years."
Autonomous Vehicle Debate Hits Uber Stock
A big reason for the "dislocation" for Uber's stock has been concerns about self-driving vehicles. Waymo's push into new markets and Elon Musk's vision of a Tesla robotaxi weighed on shares last year. Uber stock fell 2% in 2024 after rallying nearly 150% in 2023.
The fear is that Uber's dominance of the market for ride-hailing will be challenged by companies developing self-driving cars. Uber, meanwhile, has pitched itself as a crucial partner to AV developers, connecting their cars with riders.
Khosrowshahi delivered that message again to analysts Wednesday.
"While AV technology is advancing, commercialization will take significantly longer, and we have conviction that Uber will be the indispensable go-to-market partner for AV players," the Uber chief executive said. "This is undoubtedly one of our top priorities."
Uber opened up a waitlist Wednesday for Austin riders who want to take a robotaxi ride through Waymo, Khosrowshahi added. Uber is also partnered with Waymo in Phoenix and for the Google-backed startup upcoming expansion to Atlanta.
Technical Ratings For Uber Stock
But Wednesday's earnings results are a new setback for Uber stock. Shares fell back below Uber's 200-day, 50-day and 21-day moving averages.
Meanwhile, Uber stock's Relative Strength Rating is just 36 out of a best-possible 99, according to IBD Stock Checkup. That's an improvement, however, from lows near 20 to start the year.
Uber has an IBD Composite Rating of 86 out of a best-possible 99. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
