Uber (NYSE:UBER) stock is experiencing a surge in early trading following the announcement of its $7 billion share buyback plan. The ridesharing and delivery company revealed its first-ever share repurchase program, indicating its strong financial momentum.
The buyback plan comes after Uber reported its first annual profit in history for the year 2023. This positive development is certainly noteworthy. In addition, the company has provided new long-term guidance, further bolstering investor confidence.
CFO Prashanth Mahendra-Rajah expressed his optimism, stating, Today’s authorization of our first-ever share repurchase program is a vote of confidence in the company’s strong financial momentum.
Uber intends to utilize the share buybacks to counterbalance the negative impact on its stock price caused by the shares it offers to employees. Last year alone, the company spent $1.935 billion on stock-based compensations.
During the last quarter, Uber achieved a net income of $1.7 billion, a significant improvement from the $600 million profit reported in the fourth quarter of 2022. Furthermore, for the entirety of 2023, the company generated a net income of $2.15 billion, a remarkable contrast to the $9.14 billion loss recorded the previous year.
Uber has projected robust growth for the upcoming years, estimating that its gross bookings will experience a compound annual growth rate (CAGR) in the mid to high teens percentage range from 2024 to 2027. Moreover, the company anticipates its adjusted EBITDA to advance at a CAGR between the high 30% levels and 49%, excluding certain items.
Various positive catalysts are expected to contribute to Uber’s long-term success. These include expanding into overseas markets, leveraging artificial intelligence to enhance operations, and increasing the deployment of autonomous vehicles.
The implementation of the share buyback plan demonstrates Uber’s confidence in its financial position and future prospects. It aims to offset any negative effects on stock prices stemming from employee stock-based compensation. With a successful track record of profitability and positive guidance, the company seems poised for further growth.
Disclaimer: This is a news article and not a financial recommendation. Investors are advised to conduct thorough research and analysis before making investment decisions.
For more information, please visit:
– [Uber Official Website](https://www.uber.com/)
– [Uber Investor Relations](https://investor.uber.com/home/default.aspx)
