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Trends & Analysis
News

PepsiCo posts earnings beat, but misses on sales

News

Crude oil spikes after US inventories data

News

Risks on the horizon for the S&P 500?

News

GBP/USD retreats after hitting 1-month high

News

US dollar recovers from last week’s losses

News

Should you own Meta Platforms or Alphabet?

Asset Watch

Was Uber’s pullback merely a speed bump?

Thursday, August 3, 2023

After a ferocious rally off the 2022 low, Uber’s stock more than doubled before it ran into trouble on Aug. 1. The company missed analysts’ revenue expectations, reporting $9.23 billion versus the expected $9.33 billion.
Its diluted EPS came in at 18 cents versus a one-cent loss expected, and Uber generated its first-ever operating profit. After recording record free cash flow, CEO Dara Khosrowshahi touted “disciplined execution, record audience, and strong engagement,” and added that Uber is “well-positioned to sustain strong, incremental profit generation.”
Yet, with Q2 revenue only up by 14% year-over-year (YoY), some fear that a growth slowdown could plague the ridesharing giant as its market matures. However, while the algorithms are known to overreact to quarterly results, Uber still confronts a constructive technical backdrop.

The stock remains above its 10-week moving average, and when a breakdown occurred in March, support materialised near the 20-week MA. The short-term pullback in late June/early July also ended near the 10-week MA, so both levels have been solid entry points in 2023.

As a result, $44.04 (the 10-week MA) could be the first line of defence if Uber’s weakness continues. And if a breakdown follows, $39.06 (the 20-week MA) offers an even greater risk-reward proposition, as a market-wide sell-off would likely have to occur for the 20-week MA to falter.

So, is Uber still headed in the right direction, or is its next destination lower?


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