I'll Take Uber's Revenue and Order-Booking "Misses" Any Day of the Week

Shares of ride-hailing outfit Uber Technologies (NYSE: UBER) fell Wednesday following the release of its first-quarter results. And understandably so. Although profits came in better than analysts expected, both revenue and bookings fell short of Wall Street's consensus estimates. It was yet another less-than-perfect quarterly report of the type that Uber investors are growing accustomed to.

The market, however, may be missing a much bigger and more important idea here: Uber Technologies continues to do everything it's supposed to do, and is doing all of it exceedingly well. The investing crowd is just choosing not to reward it.

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That spells opportunity for you, though. A shift away from this nay-saying stance is likely in the works, even if you can't see it brewing yet.

Uber's doing (much) better than the rhetoric suggests

In the quarter, Uber turned $11.53 billion worth of revenue into EBITDA of $1.9 billion and earnings per share of $0.83. That bottom line was better than the $0.50 per share the analyst community was modeling, but revenue missed the consensus of $11.62 billion. Mobility bookings of $21.18 billion also fell short of the consensus estimate of $21.5 billion.

That was collectively enough to upend the stock, even if only modestly. Given that Uber shares were on the verge of finally breaking out to new highs, though, this seemingly minor dip isn't so insignificant. Since early last year, the stock has been oscillating along a sideways path, and Q1's results only added to investors' growing frustration, making it tougher for them to muster bullishness in the future.

Don't lose patience, however. Better days are coming, and for all the right (read "sustainable") reasons.

Chief among these reasons is the actual progress being made by the company's business. Although last quarter's revenue and mobility bookings came up short of estimates, both still improved -- and by quite a bit. Each grew 14% year over year, in fact, supported by an 18% increase in the total number of trips made. The progress isn't just continued year-over-year growth, though. Q1 was Uber's sixteenth consecutive quarter of sequential top-line growth, largely thanks to the post-pandemic renormalization of ride-hailing as an alternative to vehicle ownership or the use of public transportation.

Perhaps the most bullish aspects of last quarter's earnings report, however, were the earnings figures. Operating income of just over $1.2 billion was a major improvement on the prior-year result of less than $200 million, while net income of nearly $1.8 billion was a marked reversal from Uber's $654 million loss during Q1 2024. As with the revenue history, this figure extended a profit trend that has not only been in place for a while but also accelerated lately.

UBER Revenue (Quarterly) data by YCharts.

Don't look for this progress to slacken in the foreseeable future, either. Management says bookings are apt to grow by between 16% to 20% during the current quarter, while adjusted EBITDA should keep pace with its prior growth rate and improve by somewhere in the neighborhood of 29% to 35% year over year.

Uber is growing, and even better, much of its growth is taking shape organically, with only modest additional investments in marketing, operations, and driver pay.

Bullishness is brewing

So why isn't this scintillating story being reflected in the stock's price of late? Good question.

Some of the market's wariness may be rooted in superficial perceptions. In nearly every quarter since early 2024, at one least key metric has fallen short of estimates. Picky investors expect sales, earnings, and guidance (and, in the case of Uber, bookings) to top analysts' estimates. If one or more metrics fail to do that, investors tend to exercise rather broad caution. In other words, missing any of these key targets tends to drive Uber's stock price down.

Interested investors will want to make a point of getting over that hangup, though. The analyst community's consensus forecasts have been strangely -- perhaps even unfairly -- optimistic when it comes to Uber. The ride-hailing industry is pretty mature now. It's going to be difficult for Uber to reach their lofty growth targets even when it's doing everything right and everything is going well. Last quarter's 14% growth and management's even-better guidance for the current quarter are plenty healthy, particularly when paired with faster profit growth.

Image source: Getty Images.

There's no end in sight to this progress, either. Straits Research believes the global ride-hailing and taxi business is set to grow at an annualized pace of more than 11% per year through 2032, and predicts that the same-day delivery and logistics market -- now Uber's fastest-growing business -- will grow at an average yearly rate of more than 21% through 2033. Uber is well positioned to capture more than its fair share of both those expanding markets, and as it does so, eventually, analysts and investors alike will have to climb on board the bullish train.

Beyond all that, there's one more big potential catalyst. This technology has been generating off-and-on background discussions for years now, and it might be at least a few more before it makes a meaningful impact on Uber's business.

But robo-taxis are coming. Uber CEO Dara Khosrowshahi mentioned autonomous vehicles several times during Wednesday's conference call. At one point, he stated plainly, "We are confident that AV [autonomous vehicle] technology is the single greatest opportunity ahead for Uber" before laying out several ways such technology could be used.

Even if the exact future is still a bit murky, Uber is preparing for almost any conceivable usage.

Uber's stock is struggling to find consistent traction now. That's not an indictment of the company, though. It's the market environment and investors' perceptions that are at the heart of this lethargy. Those are actually easier challenges to overcome, and they should be cured sooner rather than later -- provided Uber Technologies keeps doing what it has been doing.

You'll want to have a position in the stock already when that tide finally turns.

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James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.