Uber Technologies (NYSE:UBER) was one of the most hyped IPOs for the last several years. It finally launched this year, and it did not hit the ground running. Increasing competition, labour disputes across the globe, and concerns over its path to profitability have spooked investors early on.
Is there any reason to trust the stock ahead of the New Year?
Shares of Uber have increased 8% over the past week, but they are still down 11% month over month. The company released its third quarter 2019 results on November 4. Revenues climbed 30% year-over-year to $3.8 billion which beat analyst estimates.
On the other hand, its adjusted EBITDA loss deepened to $585 million, which was down 28% from the prior year. Its net loss rose 18% to $1.2 billion.
Chief executive Dara Khosrowshahi struck a positive tone. He told investors that Uber had great potential to build sustainable profits by focusing on stability rather than pushing for rapid growth. It is also working to leverage its technological advantage to automate more effectively.
Rides, Uber’s core business, posted adjusted EBITDA of $631 million. This was up 52% from the prior year, and it covered central overhead costs in all five of its other divisions.
Uber has work to do in the coming quarters, but I’m taking the contrarian stance in late 2019. Shares dipped into technically oversold territory in mid-November, and although they have marginally bounced back it is still near its 52-week low. Uber stock is worth a look for growth investors before the New Year.