Uber Technologies Inc. (NYSE:UBER) surged more than 5% on Monday after raising the adjusted EBITDA target to between $130 million and $150 million in Q1 2022. The guidance was higher than previously projected $100 million to $130 million when it released the fourth quarter of 2021 results.
The company attributed the raised guidance to a much quicker than expected recovery in its delivery and mobility segment. But is Uber an outright buy?
Looking back, Uber rose more than 6% when the company reported estimate-beating results in the fourth quarter of 2021 in February. Revenue of $5.78 billion in the fourth quarter was better than the projected $5.34 billion.
Adjusted loss per share of $0.26 was better than feared $0.35 loss per share. Nonetheless, the company said that the Omicron virus was a headwind, a factor that has dampened the stock since the earnings call. Consequently, at the current trading of $28.57, the growth stock trades at a low from the post-earnings high of around $42.
UBER is bearish despite raised guidance
Source – TradingView
Technically, Uber stock is settling at the support of $28.57. Nonetheless, since October, the stock has been displaying a bearish market sentiment characterized by lower highs and lower lows. The 50-day MA remains below the 100-day MA, implying a bearish market.
The broader bearish sentiment can be connected to the concerns of the Omicron variant and projected policy tightening by the Fed. The ongoing war in Ukraine has also hit the stock. Still, the raised guidance implies a brighter outlook for Uber, and the next area of interest is if UBER maintains the $28 level.
Concluding thoughts
Uber remains a good stock for long-term hold but suffers from broader market concerns and sentiment. The raised guidance implies the company sees a brighter post-pandemic growth.
However, UBER is still not a buy in the current bearish move and could slip below $28 if the weak sentiment continues. If $28 holds, I would recommend a buy after a bullish reversal on the crossover of the 50-day MA over the 100-day MA. If it breaks below $28, the next potential support could be $25.
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