By Supantha Mukherjee
Shares in upmarket taxi service Uber fell as much as 10% in early trading yesterday after the company missed most Wall Street targets in its quarterly earnings report, in sharp contrast to upbeat numbers from US rival Lyft a day earlier.
None of the Wall Street brokerages that cover the stock changed their recommendation on Uber, and the fall was almost equivalent to the 8% surge in the company’s shares after Lyft’s numbers on Thursday.
Revenue at the company, however, grew just 14% compared to an almost 150% jump in costs, leaving the firm with a more than $5bn (€4.46bn) loss, its biggest ever.
“In a nutshell, there were many puts and takes in the quarter but overall we would characterise this print/ guidance as a B performance with the Street expecting an A+ coming off its recent IPO,” Wedbush analysts said. Until the broader market turbulence of the past week, Uber shares were recovering from a rough start to their life on the New York Stock Exchange.
That reflected continuing doubts over the solidity of the company’s long-term business model. But of the 33 brokerages now covering the stock, 21 have ‘buy’ or higher ratings, 11 are on ‘hold’ and just one has a ‘sell’ rating.
Yesterday, two reduced their price target for the stock while another two raised. Uber CEO Dara Khosrowshahi said the price war was easing and both Lyft and Uber were laying out a path to future profits.