Uber closes in on a record high as its California victory overshadows a mixed quarter
- Uber's stock price surged as much as 8% on Friday following its third-quarter results.
- The company revealed a mixed recovery, with delivery continuing to help make up for a pandemic-induced slump.
- Executives said they still aim to be profitable on an adjusted basis next year.
- Prop. 22, which passed in California this week, was a decisive win for the company in its long-running labor battle.
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Shares of Uber continued their winning streak on Friday, closing in on a record high as investors cheered mixed third-quarter results and a decisive victory in California earlier in the week.
The stock rose as much as 8.2% to hit $45.38 per share, its highest level since June 2019, shortly after the ride-hailing giant went public.
On Thursday, Uber reported more signs of a rocky recovery as it claws its way out of a pandemic-induced travel slump. Shares initially sank in after-hours trading as total revenues and earnings fell short of expectations, but continued strength in delivery helped outlook shift as Friday dawned.
"We are encouraged by the '21 profit target, and believe Uber is putting in the plumbing to profitably capture the outsized opportunity," JPMorgan analysts said Friday.
On a call following the results, executives said they still expect the company to be profitable on an adjusted EBITDA basis, including in the delivery segment, by next year.
"We are not letting up on our profitability goals, even with our Mobility gross booking still down significantly," chief executive Dara Khosrowshahi said.
Some slight additional costs from the passage of Prop. 22 in California, allowing the company to avoid classifying workers as employees, won't affect that timeline either, they said.
The stock could easily pass its all-time high of $47.08 soon, as Prop 22 "has removed one of the biggest overhangs over the stock," Dan Ives, an analyst at Wedbush, told clients in a recent note.
Lyft will report third-quarter earnings next week. Shares of Uber are now up about 50% since the beginning of 2020.
