Uber Slides After Results As Biden Withdraws Trump Era Rule For Gig Workers

Shares of Uber (UBER) are under pressure on Thursday after the company reported first-quarter results, with losses per share dramatically improving but revenue coming in below estimates. Meanwhile, the Labor Department is rescinding the "Independent Contractor" rule, which was put in place by the Trump administration and made it more difficult for gig and contract workers to argue they were entitled to minimum wage and overtime protections. While Wedbush analyst Ygal Arounian cut Uber's price target and called the regulatory environment "the elephant in the room," his peer at Morgan Stanley told investors that he sees labor regulation as "likely manageable".

RESULTS: Uber reported first-quarter losses per share of (6c), which was better than the expected (54c), and revenue of $2.9B, below consensus at $3.28B. Gross bookings grew 24% year-over-year to $19.5B, while adjusted EBITDA of ($359M) improved by $95M versus the fourth quarter. The company reported first-quarter gross mobility bookings of $6.8B, down 36% year-over-year in constant currency. In delivery, gross bookings of $12.5B grew 157% year-over-year on a constant currency basis, Uber added, pointing out that monthly active platform consumers were 98M versus 103M last year.

MOBILITY RECOVERY: Following the quarterly report, Deutsche Bank analyst Lloyd Walmsley raised the firm's price target on Uber to $85 from $82, while keeping a Buy rating on the shares. The analyst came away from Uber's first-quarter results feeling better about the recovery in the mobility business given the rebound in many markets, including several where growth is already above 2019 levels. He believes Uber's recovery and profitability is on track despite transitory investments.

JPMorgan analyst Doug Anmuth also raised the firm's price target on Uber to $74 from $72 and kept an Overweight rating on the shares following the company's first-quarter results. The company's Mobility segment continues to recover while Delivery remains strong, Anmuth told investors in a research note. The analyst believes delivery demand can sustain even as Mobility comes back, as evidenced in Sydney and New York City, where Delivery has held up well, even as dining has reopened.

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