IBD 50 growth stock Uber is in a buy zone after a strong earnings breakout last week. Shares gapped up above the 50-day moving average in strong volume and broke out of a cup base at 37.68.
First-quarter 2023 sales grew 29% to $8.8 billion from 2022's $6.8 billion. A loss of 8 cents per share beat estimates. Bookings grew 19% to $31.4 billion, powered by a 40% spurt in ride bookings and smaller 8% delivery growth. Total trips rose 24% to $2.1 billion.
The growth stock generated free cash flow of $549 million during the quarter while monthly active platform users grew 13% to $130 million.
Better yet, FactSet estimates that earnings for this growth stock will surge an astronomical 175% in 2024.
Uber has posted strong earnings and sales growth in the past eight quarters, but results have been uneven. UBER stock holds an adequate 83 Composite Rating and an impressive 94 Relative Strength Rating. In addition, the relative strength line is at a 52-week high as the stock hovers near its buy point.
However, the mediocre 42 EPS Rating reflects the massive hangover of the Covid pandemic.
Growth Stock Revenue Segments
Uber operates three segments: "mobility" for ride services, "delivery" for grocery and food delivery, and "freight," which pilots electric trucks on Southern California routes through a partnership with WattEV and CHEP.
Q1 revenue rose an impressive 72% from the first quarter of 2022 for mobility and 23% for delivery. However, it fell 23% for freight.
Last year, Uber launched its advertising business. According to analysts, the ad customer base has grown to 345,000. In the second quarter, the company expects bookings of $33 billion to $34 billion.
Uber has a presence in the U.S., Canada, Latin America, Europe and Asia.
The growth stock is an earnings option play in IBD Leaderboard. The San Francisco company is in the leisure services group, which ranks 47th among IBD's 197 industry groups.
Mutual funds own 47% of UBER stock. Institutional ownership has been increasing for the past four quarters, according to IBD MarketSmith.
Institutional owners include the JPMorgan Large Cap Growth Fund and the Franklin Growth Fund.
Exchange traded funds also own this growth stock. The iShares U.S. Transportation ETF and the First Trust US Equity Opportunities ETF hold shares.
Please follow VRamakrishnan on Twitter for more news on the stock market today.
