Uber stock took a significant hit in the early hours of trading on Thursday and has fallen 11% so far on the day. The rideshare and delivery-providing company released a better-than-expected Q3 earnings report on Tuesday, showing promising results in key areas. However, since the report, investors appear unimpressed with the company’s performance, as seen in its share value falling in the last 48 hours.
“We delivered yet another record quarter of profitable growth at a global scale, reflecting the strength of our platform, which now has over 25 million Uber One members,” said CEO Dara Khosrowshahi.
Why Is Uber Stock Down?
Consumers continued to spend more on rides and deliveries in Q3. This helped the company maintain profitability. While Uber’s results broadly beat analysts’ expectations, its bookings—the total value of transactions on its app—came in lower than expected. Hence, investors and analysts are concerned that despite the positive numbers, demand weakened last quarter.
Also Read: Meta (META) Q3 Earnings: Record Highs & Heavy Spending – What’s Next?
Compared to Q3 last year, Uber’s profits jumped to $2.61 billion from $221 million. Analysts surveyed by data provider FactSet had expected a profit of $814 million. In addition, Uber’s revenue rose 20% to $11.19 billion, also beating expectations. However, gross bookings only rose 16% to $40.97 billion, much less than analysts predicted. The drop in bookings and demand signaled concern for investors, seeing UBER shares fall as much as 11% today.
For the fourth quarter, Uber expects gross bookings between $42.75 billion and $44.25 billion, representing 16% to 20% YoY growth on a constant currency basis. The company also forecasts adjusted EBITDA of $1.78 billion to $1.88 billion. Clearly, even with this optimistic growth forecast, investors are hoping for more out of the rideshare company. Earlier this October, UBER stock flourished as Tesla (TSLA)’s Robotaxi event flopped. Now, however, Elon Musk’s EV maker is outperforming its future rival in the rideshare business.