Uber could be profitable in the third quarter. The stock rises higher.

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Uber Technologies

were up sharply on Tuesday after the app-based rideshare and delivery company said it could turn a profit in the third quarter.

In an 8-K file released Tuesday, Uber (ticker: UBER) said adjusted earnings before interest, taxes, depreciation and amortization could range from a loss of $ 25 million to a profit of $ 25 million, better than the Previous forecast “of a loss of $ 100 million.” The company cited “improvements in both mobility and delivery.”

Gross bookings for the third quarter were expected to be between $ 22.8 billion and $ 23.2 billion, up from $ 22 to 24 billion compared to previous forecasts.

For the fourth quarter, Uber now expects to post Adjusted EBITDA between $ 0 million and $ 100 million, compared to its previous outlook of “Adjusted EBITDA profitability”.

“They say the crisis is creating opportunities and this has certainly been true for Uber over the past 18 months,” said CEO Dara Khosrowshahi. “Thanks to the tireless work of the team, we have not only strengthened our global leadership in the areas of mobility and delivery; we have done it more cost effectively than ever.

“As a result, Uber is taking an important step,” he added.

Rival Uber

Elevator

(LYFT) posted adjusted earnings in the second quarter.

Analysts at MKM Partners said they were “more bullish” on Uber shares despite indications of bookings in line with Wall Street expectations. MKM noted the increase in the daily execution rate of Covid-19 cases in the United States and Uber’s indication that it achieved positive EBITDA in July and August.

MKM is pricing UBER stocks at Buy with a price target of $ 68. Forty-three analysts polled by FactSet also have an average buy recommendation on the stock and an average price target of $ 66.85.

While Uber’s outlook has improved, its drivers have yet to be ranked. A California judge struck down a law allowing companies to classify drivers as contractors rather than employees.

Superior Court Judge Frank Roesch said Proposition 22, which was passed by voters in November, was unworkable and unconstitutional in a ruling on Friday. Uber, Lyft, DoorDash (DASH) and other app-based companies have injected more than $ 200 million in support of Proposition 22, which exempted their companies from treating drivers as employees under the Act. the state. The measure was passed when 58% of California voters backed the proposal.

Uber shares rose 7.25% in pre-market trading to $ 42.68. The stock has fallen nearly 17% so far in 2021, but has gained 23% in the past year.

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