Uber's Stock Is On A Ride Wednesday - Here's Why

Uber Technologies, Inc UBER stock is trading higher on Wednesday after the ride-hailing giant announced that its Board has authorized the repurchase of up to $7 billion of the company's common stock.

Last week, Uber reported fourth-quarter FY23 results. It clocked a revenue growth of 15% year-on-year to $9.94 billion, beating the consensus of $9.76 billion. 

Uber's GAAP EPS of $0.29 beat the consensus of $0.17. Trips grew 24% year-over-year to 2.60 billion, or 28 million per day. 

The ride-hailing firm generated $768 million in free cash flow.

Meanwhile, ride-hailing company and peer Lyft, Inc LYFT reported its fourth-quarter financial results on Tuesday.

The Uber rival clocked quarterly sales of $1.225 billion, up by over 4% year-on-year, beating the consensus of $1.220 billion. 

Rides grew by 26% Y/Y to 191 million in Q4. The EPS of $0.18 beat the consensus of $0.08.

Is Uber A Good Stock To Buy?

An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action, which you can find on Benzinga's quote pages – like Uber Technologies's page, for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.

These are known as capital allocation programs. Uber Technologies does not pay a dividend, but obviously has a few ways it can return value to shareholders. Feel free to search Benzinga's dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.

For example, if you're looking to earn an annualized return of 16.7%, you'll need to buy a share of Gabelli Multimedia Trust by the 13th March, 2024. Once done, you can expect to receive a nominal payout of $0.22 on 21st March, 2024.

Buyback programs are obviously different and highly variable. A company can approve a buyback program and purchase shares as it sees fit over the course of time in which the buyback was authorized. Looking through the latest news on Uber Technologies will often yield whether or not the company has approved a buyback program recently. Buyback programs usually serve as a support for share prices, serving as a backstop for demand.

Price Action: UBER shares traded higher by 12.01% at $77.27 on the last check Wednesday.

Uber. Photo via Shutterstock