Uber’s (UBER) latest earnings shattered estimates for Q3 2024 with record-breaking profitability and revenue growth. The ride-hailing and delivery giant posted a staggering 20% year-over-year revenue growth, reaching $11.2 billion, and, in a historic first, surpassed $1 billion in GAAP operating income. This also beat analysts’ consensus estimates of $11 billion. According to CEO Dara Khosrowshahi, this reflects “the strength of our platform,” noting that over 25 million members are now subscribed to Uber One, a loyalty program designed to boost customer retention.
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Uber Q3 EPS Outshines Expectations
Uber’s earnings per share (EPS) made quite an impression at $1.20, significantly surpassing the analysts’ consensus estimate of $0.37. Additionally, adjusted EBITDA soared 55% year-over-year to reach $1.7 billion. The EPS gain speaks volumes about Uber’s strategic efficiency and the operational focus they’ve honed over the years. CFO Prashanth Mahendra-Rajah attributed this to Uber’s commitment to growth and “returning capital to shareholders.” This quarter’s EPS performance adds significant value for investors and shows the company’s drive toward more robust financial health.
Mobility and Delivery Drive Record Gross Bookings
Mobility and Delivery segments were key players this quarter. Mobility revenue, which grew by 26% to $6.4 billion, highlights Uber’s success in meeting rising demand, with average daily trips hitting 31 million. On the Delivery side, Uber continued to rake in revenue, reporting $3.5 billion, an 18% increase. The introduction of innovative features like Uber Shuttle to LaGuardia Airport and the launch of a new ad format on the app seem to be reinforcing these growth trends, according to Khosrowshahi.
Share Repurchases Reaffirm Uber’s Financial Confidence
Uber’s stock buyback this quarter, totaling $375 million, aligns with its February authorization. This repurchase showcases Uber’s intention to boost shareholder returns. Mahendra-Rajah emphasized that Uber is “on track to deliver 20% Gross Bookings growth on a constant currency basis for the full year.” This commitment to repurchasing, combined with organic growth, suggests the company’s confidence in its long-term outlook.
Uber’s Q4 2024 Outlook Hints at More Growth
For the final quarter of 2024, Uber is anticipating Gross Bookings in the range of $42.75 to $44.25 billion, which would represent a 16-20% year-over-year growth. With the continued expansion of autonomous partnerships and strategic alliances like the Turo car rental collaboration, Uber is setting the stage for a promising end to the year.
Is UBER Stock a Good Buy?
Analysts remain bullish about Uber stock, with a Strong Buy consensus rating based on 32 Buys and two Holds. Over the past year, Uber has surged by more than 65%, and the average UBER price target of $91.86 implies an upside potential of 26% from current levels. These analyst ratings are likely to change following Uber’s Q3 results today.
