Uber Sells Off to 18-Month Low Despite Bullish Guidance

Uber Technologies Inc. (UBER) fell 4% to an 18-month low on Monday, despite raising Q1 2022 adjusted EBITDA expectations from the $100 – $130 million range to the $130 – $150 million range. The company touted projected ‘earnings before interest, taxes, depreciation, and amortization’ even though it posted the first operating profit in its three-year public history in the quarter ending on Dec. 31. That’s a big deal because industry costs are now soaring as a result of rising inflation and sky-high gas prices.

Soaring Gas Prices Set to Impact Bookings

The company noted that mobility demand had “improved significantly through the month of February, with trips 90% recovered and gross bookings 95% recovered vs. February 2019. Additionally, delivery annualized run rate gross bookings reached an all-time high”. However, the Ukraine war hit headlines like a sledgehammer in the second half of the month, impacting positive consumer sentiment that had nearly shaken off the Omicron wave.

Uber CEO Dara Khosrowshahi probably didn’t expect the stock to sell off when he noted that “Our Mobility business is bouncing back from Omicron much faster than we expected. Whether for travel, commuting, or going out at night, we’re seeing healthy and growing demand across all use cases, highlighting just how eager consumers are to get moving again. In fact, airport gross bookings exiting February were up over 50% month-on-month, and we’re preparing for the upcoming travel season to be one of the strongest ever”.

Wall Street and Technical Outlook

Wall Street consensus stands at a ‘Buy’ rating based upon 34 ‘Buy’, 3 ‘Overweight’, 4 ‘Hold’, 0 ‘Underweight’, and 1 ‘Sell’ recommendation. Price targets currently range from a low of $28 to a Street-high $80 while the stock is set to open Tuesday’s session just $1 above the low target. This dismal placement highlights the abandonment of growth stocks all across the market universe, with less profitable companies taking the biggest hits.

Uber came public in the low 30s in May 2019 and entered a trading range between 47.08 and 13.71. It bounced to range resistance in November 2020 and broke out, posting an all-time high at 64.05 in February 2021. Aggressive sellers then took control, failing the breakout in May, ahead of additional losses that sliced through the IPO opening print in August. The stock is now testing summer 2020 support in the upper 20s, with a breakdown exposing the deep pandemic low in the teens.

Catch up on the latest price action with our new ETF performance breakdown.

Disclosure: the author held no positions in aforementioned securities at the time of publication.