Uber (UBER) Stock Tumbles: Q1 Bookings Miss and Unexpected Loss Shakes Investor Confidence

• Uber Technologies (UBER) reported first-quarter earnings with a net loss and revenue slightly ahead of views.
• The company also posted lower-than-expected total bookings, causing Uber stock to slide.
• Uber’s net loss of $654 million includes a $721 million headwind due to “net unrealized losses related to the revaluation of Uber’s equity investments.”

Uber Technologies reports unexpected net loss in Q1 earnings, causing a slide in stock prices. Despite revenue slightly ahead of views, lower-than-expected total bookings have raised concerns.

Unexpected Net Loss in Uber’s Q1 Earnings

Uber reported a loss of 32 cents per share on sales of $10.13 billion for the March-ending quarter, contrary to analysts’ projections of earnings of 22 cents per share on sales of $10.1 billion. This is a significant increase from the same period a year earlier, where Uber lost 8 cents per share on sales of $8.8 billion. The net loss of $654 million includes a $721 million headwind due to “net unrealized losses related to the revaluation of Uber’s equity investments.”

Lower-Than-Expected Total Bookings

Uber’s gross bookings for the March quarter were $37.7 billion, falling short of the expected $37.9 billion. Bookings include fares charged, as well as food deliveries and other services. For the current quarter, Uber guided for bookings of $39.5 billion, at the midpoint of its range. Analysts were projecting Uber would tally $40 billion in gross bookings for the June quarter.

Wall Street Response To Uber Earnings

Despite the net loss, some analysts shrugged it off as it was driven by investment markdowns. Uber’s earnings before interest, taxes, depreciation and amortization (EBITDA) hit a quarterly record of $1.4 billion, up 82% and ahead of consensus. Top-line metrics around user engagement remained robust, despite ongoing concerns around a potential for weakening consumer activity given the volatile macroeconomic backdrop.

Uber Stock: Technical Ratings

Coming into trading Wednesday, Uber stock had gained 14.3% this year, compared to an 8.8% gain for the S&P 500. At the end of Tuesday’s session, Uber stock still held a best-possible IBD Composite Rating of 93 out of 99. The score combines five separate proprietary ratings into one. The best growth stocks have a Composite Rating of 90 or better.

Conclusion

Despite the unexpected net loss and lower-than-expected total bookings, Uber’s robust user engagement and strong EBITDA are positive signs. However, the volatile macroeconomic backdrop and the company’s equity investments’ revaluation remain areas of concern. The future outlook for Uber will depend on its ability to navigate these challenges and capitalize on its growth potential.