Stock market investors are currently digesting the financial results of some of America's largest companies for the quarter ended March 31. Given the difficult economic conditions, quarterly reports are key to determining which companies are navigating them well and which are struggling. 

Uber Technologies (UBER -1.50%) experienced record demand for its ride-hailing service in the first quarter, and its stock popped 11% the day it reported its results, adding to what is now a 43% year-to-date gain. 

The Wall Street Journal tracks 45 Wall Street analysts covering Uber stock, and three-quarters of them have given it a buy rating. Just one recommends selling. Here's why investors might want to follow the Street's lead.

Ride-hailing completes its comeback

Uber operates three core business segments: Mobility (ride-hailing), food delivery, and commercial freight. Right before the pandemic struck in early 2020, the company's mobility business was more than double the size of its food delivery business, measured by gross bookings (the dollar value of the services customers paid for on Uber's platform).

As the COVID-19 situation worsened, ride-hailing companies were decimated because people were stuck under lockdown orders and social restrictions, which meant they weren't traveling. In the first quarter of 2021, bookings under Uber's mobility segment shrank by 38%, while its food delivery bookings more than doubled. People couldn't go to restaurants, so they were ordering in. 

But with social conditions now back to normal, Uber is reporting a surge in ride-hailing trips. Customers booked more than 2.1 billion rides in the first quarter of 2023, which was up 24% year over year. As a result, Uber's mobility gross bookings soared by 40% and came in on par with delivery bookings. The table below summarizes the company's journey over the last three years and how its core ride-hailing business has bounced back. 


Q1 2020

Q1 2021

Q1 2022

Q1 2023

Mobility Gross Bookings (billions)





Delivery Gross Bookings (billions)





Data source: Uber Technologies.

Uber is inching toward true GAAP profitability

The reporting of non-GAAP (adjusted) numbers is very common in the technology sector. Many companies invest heavily in acquiring new customers and generating growth, foregoing profitability in the process. However, they like to inform investors how the business would have performed if a series of one-off and non-cash expenses were removed from the results.

In Uber's case, it generated a net loss of $157 million in Q1. However, Uber actually generated positive earnings before interest, taxes, depreciation, and amortization (EBITDA) of $761 million on an adjusted basis, which was a record high. 

For example, the company dished out $470 million in stock-based compensation to employees during the quarter, which is a non-cash expense, though it must be included under generally accepted accounting principles (GAAP) reporting. Similarly, it also spent $250 million on legal, tax, and regulatory reserve changes and settlements. 

Unfortunately for tech companies like Uber, investors have been heavily focused on GAAP profitability over the last 18 months, so adjusted figures haven't been as important. Why? Because companies delivering true profitability are considered less risky investments in a tough economic climate where it could be very difficult to raise capital if necessary. 

However, Uber's net loss of $157 million was a vast improvement over the $5.9 billion it lost in the same period last year. That figure was negatively impacted by volatile fluctuations in the value of Uber's investments which, again, must be included in GAAP reporting.

Uber has a substantial opportunity ahead

Uber saw a 35% surge in the number of active drivers in Q1 compared to the same time last year, which is a big boost to its ecosystem. It also experienced a substantial growth of 100% in some of its newer mobility products like Uber Reserve, which allows consumers to book their rides up to 90 days in advance, which is great for those early-morning trips to the airport. 

But longer term, the future of ride-hailing might be autonomous. Uber is working on a new self-driving platform with Motional, which is a partnership between automaker Hyundai and mobility technology company Aptiv. But it's not the only player in this game -- electric vehicle giant Tesla is widely expected to unveil a robotaxi in 2024. 

Financially speaking, this opportunity could be enormous, given that human drivers are Uber's largest expense. Cathie Wood's Ark Investment Management predicts the autonomous ride-hailing industry could generate $4 trillion in revenue by 2027. Uber's net benefit from that scenario has mind-boggling potential -- it could capture significant revenue growth while at the same time eliminate costs, which would theoretically make the company enormously profitable on a consistent basis. 

That's arguably the most enticing part of Uber's long-term story, so with 75% of analysts tracked by The Wall Street Journal giving the stock the highest-possible buy rating right now, it might pay for investors to listen.