Shares of Uber are trading more than 6% higher in the premarket trading session after the company CEO’s moved the EBITDA profitability target to the Q4 this year, ahead of its original promise of profitability in 2021.
Fundamental analysis: Growth picks up
Uber reported a loss for the fourth-quarter (negative $0.64 per share), however, it was still better than the negative $0.68 expected from the analysts. In total, the company lost $1.1 billion in the fourth-quarter.
The revenue was somewhere in line with the expectations – $4.07 billion vs $4.06 billion – an increase of 37% from a year earlier.
“In a world where investors increasingly demand not just growth, but profitable growth, we are well-positioned to win through continuous innovation, excellent execution, and the unrivaled scale of our global platform,” said Khosrowshah.
What got the stock price going is a claim from the CEO Dara Khosrowshah who moved the EBITDA profitability target to Q4 2020. Previously, Uber had communicated that it expected to be in that position by 2021.
“Our revenue growth continued to accelerate in Q4, with adjusted net revenue up 43% year-over-year in constant currency. We consistently outperformed our adjusted EBITDA targets in 2019, including in the fourth quarter. Our focus on disciplined capital allocation is part and parcel to achieving our financial goals, and the recent sale of our India Eats business further demonstrates that commitment,” said Nelson Chai, Uber’s CFO, in the company’s earnings statement.
Still, Uber expects to lose $1.35 billion this year, which is positive bearing in mind that it has lost $1 billion or more in each quarter since it went public in May last year.
Technical analysis: Stock price gaps higher
The Uber stock price is trading above this week’s high of $38.99, which is also the six month high for the stock. The $39 handle represents the key short-term resistance for Uber bulls, and any weekly close above this level is likely to represent a major bullish development.
The next level of resistance is located around the $42 mark and is likely to attract the bears’ attention. A potential pullback toward the $38 – $39 area should represent a solid opportunity for investors who are looking to buy Uber stock.
Shares of Uber are trading around 6% higher in the premarket trading session after the company reported a fourth-quarter loss that was narrower than analysts’ estimates, as well as the CEO’s claim that the company will reach a key profitability goal sooner than expected.
The stock price is likely to close above the $39 resistance, which should pave the way for more gains in the near future.