Uber Technologies (NYSE:UBER) released Q1 earnings that were a mixed bag. EPS handily surpassed expectations, but revenue and gross earnings were shy of the Wall Street consensus. This immediately led to UBER stock tanking, though not by much.
Investors are now parsing these figures and whether or not the bottom-line performance is worth chasing despite the top-line softness. And obviously, the bad macros. The stock is still near historical highs, but many think even the small dip is worth buying.
Uber posted a solid net profit of $1.78 billion, or $0.83 per share. This is well above what analysts had expected at $0.5 per share. The profit also marked a substantial turnaround from a loss of $0.32 in the same quarter of the previous year.
Monthly Active Platform Consumers (MAPCs) grew by 14% year-over-year to 170 million, and total trips increased by 18% to 3.04 billion. According to the CEO Dara Khosrowshahi, every aspect of the company’s multi-year growth strategy is thriving.
On top of this, Uber projects Q2 gross bookings to be between $45.75 billion and $47.25 billion. At the midpoint, it is ahead of prior analyst expectations.
Despite the strong profit story, Uber's revenue for Q1 2025 came in at $11.53 billion. This implies a 14% increase year-over-year from $10.13 billion, but it fell slightly short of the $11.62 billion analysts had anticipated.
Gross bookings also missed expectations slightly, totaling $42.8 billion against a forecast of $43.1 billion. Consequently, Uber's stock is now down some 4% from May 6 highs.
UBER stock may look surprisingly cheap due to its price-earnings ratio being at 18 times right now, but that is not at all the case. The stock trades at a forward PE ratio of around 34 times. If you take out non-recurring items, it is still over 20 times earnings.
UBER also changes hands at around 4 times sales, and all these metrics are more or less in line with other companies in the software industry. As long as Uber keeps posting solid earnings and there are no severe macro challenges going forward, it should easily be able to maintain this premium. The company has historically traded at high valuations back when it wasn’t even profitable, and now that it is coming out with solid figures, the stock should go higher as long as profits do. I’d buy the “dip.”
The consensus price target of $93.84 implies 12.4% upside, though price targets go as high as $115.
