Uber Stock Price Gaps Higher On Profitability Promise

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.

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.

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.

Summary

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.