Uber (NYSE:UBER) stock is rallying higher after the company reported much stronger-than-expected EPS for the second quarter. The firm’s Q2 revenue came in slightly above analysts’ average estimate, while the midpoint of its Q3 adjusted earnings range was also slightly higher than analysts’ mean outlook.
Importantly, the company’s top and bottom lines, along with its usage metrics, also increased by large amounts last quarter.
UBER Stock and Strong Q2 Results
Uber reported EPS of 47 cents for the period, well above analysts’ average estimate of 31 cents per share. Meanwhile, sales came in at $10.7 billion, slightly above the estimate of $10.57 billion.
“Strong topline trends and operating leverage […] demonstrate the durability of our growth and significant cash flow generation underlying our platform,” Chief Financial Officer Prashanth Mahendra-Rajah said in a statement.
Powerful Growth and Guidance Above Expectations
During the quarter, revenue jumped 16% year-over-year (YOY) while the gross bookings of Uber’s mobility unit surged 23% YOY to $20.6 billion. Although the sales increase was slightly below CEO Dara Khosrowshahi’s previous guidance for a 20% gain, a 16% surge is still impressive given the company’s huge size.
On the user front, the firm’s monthly active platform consumers jumped to 156 million last quarter versus 137 million in Q2 2023. Uber also provided 2.77 billion trips in Q2, up from 2.28 billion during the same period last year.
As far as guidance goes, Uber expects its Q3 profits, excluding certain items, to come in between $1.58 billion and $1.68 billion, “with the middle of the range just above the $1.62 billion average estimate,” per CNBC. Uber also provided bookings guidance of $40.25 billion to $41.75 billion. The midpoint of that range is roughly in-line with the mean outlook.
The Valuation of UBER Stock
Uber has an elevated price-to-earnings (P/E) ratio of 46.3 times. Meanwhile, the company’s PEG ratio, coming in at 1.2 times, is somewhat elevated.
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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
