Uber Technologies Inc. [NYSE: UBER] released its Q1 results after markets closed on Thursday, and the numbers have beat analysts’ expectations. The company reported Q1 revenues of $2.75 billion against Wall Street’s expectation of $2.75 billion. The loss per share on Uber has also declined, and beat analyst expectations. The company has also reported a loss of $2.26 a share, against Wall Street’s expectations of $2.36. Uber’s trips are also on the rise, and have hit 17 million a day. They are up by 36% year-over-year. Uber believes that its global reach will continue to set it apart from the competition, and will anchor its growth, even as it struggles to turn a profit.
These results have seen the company trade in the green in pre-market trading. That’s an indicator that positive sentiment is setting in, even before the markets open. From a look at the 1-day chart, Uber is highly volatile, but upside momentum is still there and could turn positive. If it opens the day’s trading above $40, which has been an area of resistance in the last 24-hours, then it is likely to trade in the green in Friday’s trading session. More long-term, the monthly chart paints a picture of a stock that is trying to rebound. After the huge decline in value that Uber faced post-IPO, things might be looking up. The decline has slowed down, and with the stronger earnings, Uber could start to gain in value over time.
Long-term, there are several factors that could positively impact on the value of this company. One of them is driverless cars. After suspending driverless cars in early 2018, the company announced in December that it would resume testing with more safety measures in place. A breakthrough for Uber on this front could see the company cut operational costs significantly. That’s because, it would be well positioned to eliminate drivers and the associated costs in all key markets. This is a factor that could see Uber turn to profitability over the long term, and establish itself as a major tech giant going into the future.
Another potential factor that could change Uber’s prospects long-term is its forays into food delivery, through Uber Eats. According to the company CEO, Uber Eats continues to bring in new customers to the business, and its share of revenues is growing. Uber Eats generated $536 million in Q1 of 2019. That’s a signal that it has the potential to become a major revenue driver for Uber in the long run. Riding on the strength of its ride sharing app, Uber is well-positioned to keep venturing into new products similar to Uber Eats. This could significantly help drive its bottom-line, and by extension its share price.
With such prospects, it is not surprising that some analysts have a positive outlook for Uber, in spite of its huge losses.