TLDR
- Uber shares declined 5% on Tuesday even after reporting Q3 revenue of $13.47 billion that beat estimates
- CNBC’s Jim Cramer advised investors to buy the weakness, citing strong execution and profit growth
- BofA Securities lifted its price target to $119, suggesting 26% upside from current price levels
- Trip volume increased 22% while mobility growth hit 19% year-over-year in the quarter
- Earnings per share of $1.20 crushed analyst expectations of $0.69 by nearly 74%
Uber stock tumbled over 5% Tuesday despite delivering third quarter results that beat analyst expectations across key metrics. The decline surprised market watchers given the strength of the earnings report.
The company reported revenue of $13.47 billion, surpassing Wall Street’s estimate of $13.26 billion. Earnings per share came in at $1.20, nearly doubling the consensus forecast of $0.69.
Jim Cramer addressed the selloff on Mad Money, telling viewers the drop represents a buying opportunity. He labeled Uber a “buy on weakness” and said the quarter showed nothing concerning.
EBITDA reached $2.26 billion for the quarter. While marginally below expectations of $2.27 billion, the figure represented 33% growth compared to the prior year.
The stock has climbed 57% year-to-date. Performance in both Rides and Delivery segments continues driving the rally.
Analysts Boost Price Targets
BofA Securities increased its price target to $119 from $115. The firm kept its Buy rating intact on the stock.
The updated target implies 26% upside from Tuesday’s closing price of $94.67. Uber recently traded near its 52-week high of $101.99.
Mobility growth excluding currency effects reached 19% year-over-year. Trip counts jumped 22% in the same timeframe.
Profit margins grew 1.6 percentage points to 16.8%. The expansion came as Uber increased platform usage and market share.
Cramer praised the Uber One subscription program. He said the membership offering builds loyalty and creates predictable revenue.
Margin pressure emerged as a talking point for some investors. Cramer dismissed these worries, noting competition from DoorDash and Lyft while emphasizing Uber’s scale advantages.
Market Conditions Impact Trading
Adjusted costs rose 18% in the quarter versus 15% in Q2. The company is investing in growth initiatives across its platform.
BofA analysts observed that margin growth decelerated but profit expansion remains healthy. The firm sees ongoing market share gains ahead.
Cramer blamed broader market weakness for the stock’s decline. He described it as “a tough tape day” rather than a response to Uber’s performance.
Analyst consensus on TipRanks shows Strong Buy with 27 Buy ratings and 4 Hold ratings. The average price target sits at $110.61, implying 16.92% upside.
Trailing twelve-month revenue totals $49.61 billion. EBITDA for the period stands at $5.29 billion.
The quarter benefited from membership program growth, consumer demand for affordable rides, and retail delivery strength. These factors supported the mobility segment’s acceleration.
Cramer told viewers the quarter delivered solid results. “I’d be a buyer into weakness after today’s pullback and tomorrow’s uncertainty,” he stated.
Uber recently touched its 52-week high before Tuesday’s retreat. Analysts maintain positive outlooks based on consistent execution and growth momentum across business lines.
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