Uber (NYSE:UBER) stock is advancing in early trading after the ridesharing and delivery company announced its first-ever share-buyback plan. Specifically, the firm’s board agreed to allow the firm to take up to $7 billion of UBER stock off the market.
The move comes shortly after the company announced that it had generated the first annual profit in its history in 2023. Also noteworthy is that Uber provided new long-term guidance this morning.
Uber’s Share Buybacks and Move Into the Black
“Today’s authorization of our first-ever share repurchase program is a vote of confidence in the company’s strong financial momentum,” CFO Prashanth Mahendra-Rajah said.
The ride-sharing giant stated that it would use the buybacks as a means of offsetting the negative impact on its stock price of the shares that it provides to employees. Last year, Uber shelled out $1.935 billion of such stock-based compensation.
Last quarter, Uber’s net income came in at $1.7 billion, versus a profit of $600 million in the fourth quarter of 2022. For all of 2023, the firm generated net income of $2.15 billion, versus a $9.14 billion loss in 2022.
UBER Stock: An Optimistic Three-Year Guidance
From 2024 through 2027, the ride-sharing firm is predicting that its gross bookings will climb by “mid to high teens percentage” levels on a compound annual growth (CAGR) basis. Further, it anticipates that its EBITDA, excluding certain items, will advance at a CAGR between the high 30% levels and 49%.
Among the positive catalysts from which Uber expects to benefit over the longer term are expansion in overseas markets, enhanced use of AI, and increased deployment of autonomous vehicles.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
