Uber stock price plunged hard this week as concerns about competition from Tesla rose. It dropped to a low of $82.93, its lowest level since May 12. It has plunged by 10% from its highest point this month, meaning that it has moved into a correction. So, are the Tesla risks warranted?
Uber stock price crashed amid Tesla concerns
Lyft and Uber stock price plunged after Elon Musk said that Tesla was testing its self-driving Model Y vehicles on Austin public streets without any incidents. He said that the tests were taking place ahead of schedule and that the company would deliver its vehicle to customers next month.
Uber stock price crashed because the new development means that the company is on track to launch its robotaxis. Analysts believe that these taxis could disrupt Uber’s business and lead to lower sales and profits.
For the past several days, Tesla has been testing self-driving Model Y cars (no one in driver’s seat) on Austin public streets with no incidents.
A month ahead of schedule.
Next month, first self-delivery from factory to customer.
Still, the Uber stock crash seems like an exaggeration for several reasons. First, it will take a long time for Tesla to become a major player in the robotaxi industry because of the complexities involved. Incorporating autonomous vehicles in other countries will take time.
Second, the company has a partnership with Alphabet, the creator of Waymo, one of the top players. There are also signs that Uber will ultimately will partner with Tesla in its autonomous vehicles.
Further, Uber’s business has become more diverse in the past few years, with food and grocery delivery contributing substantially to its business. It will be hard to automate this business.
Therefore, there are signs that the Uber share price crash was unwarranted, as it has done in the past few years.
Uber’s business is doing well
Uber chart by TradingView
The annual results show that Uber’s business has done well in the past few years, with its revenue rising from $11.1 billion in 2020 to $45 billion in the trailing twelve months.
It has also become a highly profitable company, with its annual profit rising from a $9 billion loss in 2022 to $12 billion in the TTM.
The most recent results showed that its revenue rose to $11.5 billion in the first quarter, from $10.1 billion. Its mobility revenue rose by 15% to $6.4 billion, while its delivery revenue rose by $3.7 billion.
Uber’s adjusted EBITDA also improved from $1.38 billion in Q1’24 to $1.8 billion this year. Also, the number of monthly active platform customers rose by 14% to 170 millon.
Wall Street analysts expect that the revenue will rise by 16.38% this quarter to $12.45 billion, while the annual revenue will be $50.5 billion this year. It will then make almost $60 billion in 2026.
Read more: Uber stock: could it surpass $100 in 2025?
Uber stock price analysis
Uber stock chart | Source: TradingView
The daily chart shows that the Uber share price peaked at $93.36 this month and then dropped to $82 as Tesla concerns remained. It is attempting to retest the support at $82, the highest swing on February 18.
Uber shares have remained above the 50-day and 100-day Exponential Moving Averages (EMA). However, the two lines of the MACD have made a bearish crossover, while the Relative Strength Index (RSI) has moved below the neutral point.
Therefore, the Uber share price will likely drop to $82 and then resume the uptrend, potentially to the year-to-date high of $93.35.
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