Uber’s shares fell 7.4% in pre-market trading after the company reported weak fourth-quarter results, despite beating expectations for user growth. The decline was attributed to missed gross booking guidance and concerns over commercializing its autonomous vehicle business.
However, Uber’s quarterly earnings did show a stronger side, with revenue outperforming expectations. The company increased its number of users this quarter, beating forecasts. This led to a 2.1% year-to-date gain in shares.
Despite the mixed results, investors are cautiously optimistic about Uber’s prospects. The stock market has been volatile in recent months, with Uber’s share price falling 25.3% from its 52-week high. However, if you invested $1,000 in Uber five years ago, your investment would now be worth $1,752.
The company’s first-ever share repurchase program, worth up to $7 billion, was also announced, signaling confidence in its financial momentum. Furthermore, Uber expects gross bookings growth of 15-20% over the next three years, with adjusted EBITDA projected to accelerate at more than two times that growth rate.
In contrast, rival Lyft reported a strong fourth-quarter, with rides growth accelerating for the fourth quarter in a row and guidance coming in ahead of expectations. The results demonstrate a strong demand for ride-sharing services amid economic worries.
The shares closed the day at $64.49, down 7.5% from previous close.
Source: https://finance.yahoo.com/news/why-uber-uber-shares-falling-181428770.html