Uber profits mark a "great first step" for the company that arrived, says an analyst

Uber profits mark a "great first step" for the company that arrived, says an analyst
The shares of Uber and Lyft rise

Uber Technologies Inc. shares are gaining in pre-market trading on Friday after the company delivered its first earnings report since it went public and issued comments that the driving industry in the suggested trends could improve.

The report was a "great first step" for the company, which has seen its struggle in actions since the initial public offering in early May, according to Wedbush analysts Daniel Ives and Ygal Arounian. Uber UBER, + 1.28% showed that "improve the metrics [that] help paint a strong story," they said.

Uber shares rose 2.5% in pre-market trading on Friday.

"While Uber did not offer an Ebitda or revenue guide for the entire year, it noted that it expects rates to improve in Q2 and throughout the year, which will drive the acceleration of growth [of adjusted net income] as throughout the year, and contribution margins to improve in the second quarter and the rest of the year, "Wedbush analysts wrote.

They also highlighted the early success of Uber with its customers. "We continue to see this as Uber's biggest differentiator since it is the only one among its competitors that has a massive base in both global opportunities," analysts who have a rating and performance above the $ 65 target price.

Other people were less likely to know about Uber's positioning after the report.

Shyam Patil, of Susquehanna, wrote: "There were no surprises for the first quarter, given the preliminary results, although it was surprising that the company did not want to provide forward guidance, especially since the competitive environment is becoming more rational."

He noted that some players in the market are becoming aggressive with their pricing tactics, but argued that "the complexity of the business, the sending of numbers in the visibility of the lack, and a precarious competitive landscape, actions vary."

Patil ranks the stock at a neutral level with a target of $ 42.

GIVES. Davidson analyst Tom White reported Uber's revelation that his contribution margin in the top five countries ranged between -10% and 54% in the first quarter. "For us, [Executive President Dara Khosrowshahi] seemed to imply that the United States was the -10% market, calling it 'atypical' because of Uber's damaged brand in the country and a strong # 2 player in Lyft." wrote White.

According to the comment provided here "the leverage of the long-term model [of Uber]", according to White, but suspects that the estimates of the purchase side for the company will be the last report after much upward. White has a neutral rating and a $ 46 goal in the action.

The shares of rival Lyft Inc. LYFT, + 5.98% saw their shares also rise in the market, and JP Morgan argued that the Uber report has been read by the small giant that it arrests, especially when Uber management discussed a movement towards a more rational system. competitive environment

"We believe that this change in competitive dynamics is fundamental for both companies to come closer to profitability," wrote Doug Anmuth, of J.P. Morgan, who rates Lyft's overweight stock with a target price of $ 86. "With a little more distance from their IPOs and now that both reported gains in Q1, we see the consistent commentary by Lyft and Uber as favorable for the industry and a positive catalyst for Lyft's actions. "