Uber shares surged after reporting record performance in March and confirming earnings forecast for 2021. Demand for Uber taxis has rebounded on the back of mass vaccinations and the lifting of quarantine restrictions in the US, with Uber Eats food delivery continuing to be popular.
Shares in Uber Technologies (UBER) rose more than 3 per cent before trading opened on Monday after the international company reported record results in March and reiterated its promise to be profitable this year.
Revenue for taxi service Uber was $30 billion in March, up 9% from a month earlier, according to documents filed with the US Securities and Exchange Commission (SEC). Revenues for food delivery service Uber Eats topped $52 billion, up 150% from the same period last year. Collectively, Uber said its total gross orders reached the highest monthly level in its nearly 12-year history.
This is good news for Uber investors and an additional signal that the US economy continues to recover quickly.
Despite revenue declines in each of the last three quarters through the end of 2020 due to the COVID-19 pandemic, Uber expects growth to recover and reaffirms its forecast to achieve EBITDA (earnings before interest, taxes and depreciation) in 2021.
A factor helping Uber cut its taxi service losses was the Uber Eats business, as the pandemic caused a boom in demand for food delivery services. In February, Uber expanded its Eats business with the acquisition of major alcohol delivery company Drizly. The company is also expanding its service into international markets and non-food deliveries.
Amid renewed demand for taxi services, Uber announced a one-time expenditure of $250 million to restore drivers' jobs, pay their bonuses and guaranteed wages. During the release of Q4 and full year 2020 results, Uber management speculated that it could face a shortage of drivers after demand for the taxi service recovered to previous levels.
Uber shares have risen 13% since the start of the year, having received more than six positive valuations and outlooks from investment firms since February. Uber shares have received outperform and buy ratings, with target prices ranging from $68 to $75 against Friday's closing price of $57.68.