Uber drives further up the road to redemption

Uber quarterly results: Uber Technologies Chief Executive Dara Khosrowshahi is shifting the ride-hailing company into a higher gear, but investors are lagging behind. The $95 billion group on Tuesday reported its first quarterly operating profit for the three months to June and more than doubled its free cash flow to over $1 billion.

The numbers confirm that Khosrowshahi is strengthening Uber’s fundamentals. Revenue in its mobility unit rose 38 per cent year-on-year to $4.9 billion. It’s further evidence that the company is vanquishing rival Lyft – analysts expect the smaller ride-hailing group’s top line in the same quarter to expand by just 3 per cent to $1 billion, according to Refinitiv. In food delivery, Uber’s revenue was up 14 per cent on the same period a year earlier, half the growth rate that Wall Street expects from DoorDash. But the delivery group led by CEO Tony Xu is still some way from making an operating profit.

Uber shares fell almost 6 per cent on Tuesday morning, taking some of the shine off a stock that has almost doubled since the beginning of the year. If the company hits its own forecast of some $5 billion in adjusted EBITDA in 2024, its enterprise value is about 20 times that measure of profit. DoorDash, meanwhile, trades on a multiple of roughly 27 times. Khosrowshahi remains some way from his destination on the road to redemption. 

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