By Mackenzie Tatananni

Uber's soft guidance and fourth-quarter earnings report failed to impress, but the stock was on the rise Thursday following a wave of support from analysts who insisted that the results weren't all doom and gloom.

Shares of Uber Technologies climbed 7% to $69.01 on Thursday, putting the stock on track for its largest same-day percentage increase since Oct. 11, 2024, according to Dow Jones Market Data.

The stock fell more than 7% to close at $64.48 on Wednesday following the ride-sharing company's latest earnings report. While revenue topped analysts' expectations, other metrics sharply missed estimates and gross bookings guidance for the current quarter was weak.

Thursday's gains came as Bank of America Securities analysts raised their price target on Uber stock to $95 from $93, while maintaining a Buy rating.

The analysts noted that Uber's reported bookings and revenue beat consensus estimates, while trips on the platform "came in strong" as they topped 3 billion, representing 18% growth from the previous year.

Gross bookings growth of 21% also outpaced the firm's 19% estimate, the BofA team noted. Strength in the quarter was driven primarily by the Uber's Delivery business, which includes services like Uber Eats.

"Per management, Delivery exceeded internal expectations, driven by membership adoption and outperformance in Grocery and Retail," the analysts said. They noted that growth in Uber's Mobility segment was stable quarter-over-quarter.

However, fourth-quarter results were "not spotless," the BofA team said, adding that Uber's move into the autonomous vehicle market complicates matters.

"We think investors that are negative on Uber's AV disruption risk could be pressuring the stock," the analysts wrote. In their view, positive data from Uber's Austin launch with Waymo, new partnerships, and growing AV traction in the auto industry could boost the price of shares.

Also on Thursday, analysts at Seaport Research Partners raised their price target to $84 from $82 and reiterated a Buy rating on Uber shares. While Uber reported a "somewhat mixed [fourth quarter] and guidance," the analysts said they were encouraged by stable growth in Mobility bookings and continued momentum in Delivery.

Seaport Research acknowledged that AV commercialization would likely take a while, "as several pieces of the go-to-market puzzle still need to come together," including a consistent super-human safety record.

"Uber noted it will have much more to share through the year, starting with its public launch with Waymo in Austin next month and Atlanta this summer," the Seaport team wrote.

On Wednesday, Needham & Co. analysts reiterated a Buy rating and $90 price target on Uber shares, though the firm acknowledged lingering uncertainty on the AV front.

William Blair analysts maintained an Outperform rating on the stock, arguing that Uber's AV strategy, "while it may not fully pacify investor concerns," seemed pragmatic.

Other firms were more hesitant. On Wednesday, Truist Securities analysts reiterated a Buy rating, while lowering their price target to $90 from $95. While Uber's first-quarter guidance shows that demand for Mobility and Delivery remains robust, the outlook came in light on gross bookings and adjusted earnings before interest, taxes, depreciation, and amortization, the analysts wrote.

In their view, "Uber is well-positioned to be the partner-of-choice for AV players, but risks remain." Additional partnerships around the world and faster roll out in the U.S. are crucial to the company's positioning within the AV market, the Truist analysts said.

Benchmark Equity Research reiterated a Hold rating on the shares in a Wednesday research note. "Given Uber's talk of promos and incentives rather than quoted pricing to maintain market share, we think it will be fascinating to see where frequency expectations shake out for Lyft," analysts wrote.

The rival ride-share platform is set to report earnings on Feb. 11. Lyft said Thursday that it was partnering with Anthropic, an Alphabet-backed startup, to bring "customer-first, AI-powered Lyft products" to market.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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February 06, 2025 15:39 ET (20:39 GMT)

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