Uber (UBER) stock fell Wednesday after the company saw an improvement in bookings growth in its Fiscal fourth quarter but served up some lackluster guidance for the current quarter.
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Shares fell as much as 7% in pre-market trading ahead of the open on Wall Street, as it warned that a stronger U.S. dollar would crimp earnings despite hailing a “record” final quarter of 2024.
The ride-hailing and delivery company expects current quarter gross bookings between $42 billion and $43.5 billion, at the low end of estimates, with the company saying that the negative effect of the dollar’s rally since the last quarter was worth about $1 billion.
The company reported Fiscal fourth quarter earnings before interest, taxes, depreciation and amortization (EBITDA) were $1.84 billion, just a little short of the $1.85 billion estimated by Wall Street.
Q4 income from operations, the key profit gauge, came in light at $770 million, up 18% from a year ago but below the average estimate of $1.2 billion as CEO Dara Khosrowshahi said that “discrete legal and regulatory related matters” offset a “strong operating performance.”
UBER Hails Gross Bookings Growth
Gross bookings grew in Q4 at 18% year-over-year, helping revenues to grow 20% to $12 billion. Mobility gross bookings rose to $22.8 billion, while Delivery bookings climbed to $20.1 billion. Overall gross bookings rose to $44.2 billion, which topped the expected $43.5 billion.
“Record demand in both Mobility and Delivery helped us grow gross bookings faster than the high end of our guidance, and we closed out 2024 exceeding our three-year outlook,” said Prashanth Mahendra-Rajah, UBER CFO.
It comes as UBER gears up for the launch of its robotaxi rides in Austin, Texas through a partnership with Alphabet’s (GOOGL) Waymo.
Is UBER a Good Stock to Buy?
Overall, Wall Street analysts rate UBER stock a Strong Buy, based on 28 Buys and two Holds. The average UBER price target of $92.11 implies 32% upside, with the stock up 15% this year. Ratings are likely to change after the earnings release.
