Uber market value erodes after $654 million Q1 net loss, weak Q2 forecast

Global ride-hailing major Uber witnessed an erosion in market capitalisation value after a poor quarterly show, combined with a weak forecast for the April-June period, led to its shares tumbling in the US stock markets on May 8.

The shares dipped by as low as 9% during intraday trade, taking Uber on the course to shed around $10 billion in market value. However, the stock partially recovered in the late trading session, settling 5.7% lower at $66.4 apiece. The market cap stood at $138.2 billion, down from $146.6 billion a day earlier.

The m-cap could dip further if the losses extend for a second day in a row during the trading session on May 9.

Surprise Q1 loss

Contrary to the profitable forecast for the quarter, Uber posted a net loss of $654 million in Q1 (January-March 2024). This was a result of additional expenses incurred for legal requirements, provisions, and also on account of fair valuation in some of the companies in which the mobility giant has invested.

The net loss disappointed the market, as the consensus estimates showed that the company was likely to log a net profit of $503 million in the quarter ended March 31, 2024.

The company, on an adjusted basis, recorded a net loss of 32 cents per share, as against the estimate of net profit of 23 cents a share.

The amount mopped up through gross bookings, a key metric to assess the fiscal health of the ride-hailing platform, came in at $37.65 billion, missing the consensus estimate of $37.92 billion.

The revenue from operations, however, rose 15% year-on-year to $10.13 billion. It met the analysts expectation of $10.11 billion.

The key factor that set Uber shares tumbling on the bourses on May 8 was the weak forecast for the current quarter ending June 30, 2024. The company sees gross bookings between $38.75 billion to $40.25 billion, which is lower than the estimate of $40.04 billion.

Lyft shares surge 8%

The hammering of Uber’s stock coincided with a rise in the shares of its smaller rival Lyft. The latter’s upbeat revenue guidance, shared late on May 7, sent its stock soaring by as high as 8% during the trading session on May 8.

The gross bookings, or the value earned in dollar terms through the rides booked, is seen by the company in the range of $4 billion to $4.1 billion in the April-June period, which is higher than the analysts’ estimate of $3.96 billion, as per the data shared by LSEG.

Shares of Lyft pared some of the gains to settle 7.1% higher at $17.78 apiece on Nasdaq.