Is the Uber stock a buy or sell after the stellar earnings?

The Uber (NYSE: UBER) stock price jumped sharply after the company published strong quarterly results. The stock rose by 4.8% on Wednesday and by over 5% in extended hours. In total, the shares have jumped by more than 30% from the lowest level this year.

Uber earnings review

Uber is one of the biggest ride-hailing companies in the world with a combined market capitalization of more than $77 billion. The company operates globally where it has millions of users every day.

On Wednesday, the company said that its business did well in the fourth quarter as the industry bounced back.

Its total gross bookings jumped to $25.9 billion as its monthly active users soared to a record high of 118 million.

In its mobility business, the company saw record bookings growth of 67% while its delivery bookings jumped by 33% in the third quarter. It was the first quarter that the division was EBITDA profitable since the company went public.

Uber’s management expects that its business will do well this year as demand rises. Precisely, the firm expects that it will deliver incremental EBITDA margins in both its mobility and delivery businesses. The firm ended the quarter with about $4.3 billion in cash and about $12.5 billion in equity stakes. Lyft also had a strong quarter.

So, is Uber a good investment? Analysts think so. According to Webull, the average estimate of the Uber stock price is $64, which is significantly higher than the current $40. The most optimistic analyst expect that the shares will rise to $80 while the most pessimistic expects that the stock will crash to about $34.

In all, there are positive catalysts for the stock in 2022. As countries like Australia and the UK reopen, there will be more demand from tourists this year. Many US states like New York have even ended their mask mandates.

Uber stock price forecast

The daily chart shows that the Uber stock price has been in a strong bullish trend in the past few days. The stock has also managed to move slightly above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has been rising.

Uber shares have also formed a descending channel pattern that is shown in red. Therefore, there is a likelihood that the stock will keep rising as investors target the upper side of the channel. However, a drop to the lower side of the channel cannot be ruled out also.