Uber(NYSE: $UBER) Shares Surges on Inclusion in S&P 500
Key Takeaway
1. Uber is joining the S&P 500, according to an announcement late Friday.
2. The ride-hailing company generated positive earnings in the latest quarter and over $1 billion in profit in the last four periods.
3. Uber has a market cap of about $118 billion, while the median market cap of companies in the S&P 500 is just over $31 billion.
Uber shares rose 5% in extended trading on Friday after the ride-hailing company was added to the S&P 500 Index, replacing Sealed Air Corp.
The change will take place prior to the open of trading on Monday, Dec. 18, according to a press release.
A company’s stock price often rises on news that it’s joining the S&P 500 because fund managers who track the benchmark, which gets updated each quarter, have to acquire the shares. Companies also have to meet certain valuation and profitability requirements.
Uber shares debuted on the New York Stock Exchange in 2019, but the company was burning cash as it had to pay drivers enough money to stay competitive in a low-margin business. Its preferred metric was adjusted earnings before interest, tax, depreciation and amortization, or EBITDA.
Most of Uber’s adjusted EBITDA comes from mobility, but the company made its delivery business profitable faster than planned, after recession-fearing investors became more averse to investing in money-losing companies. Growing advertising revenue has also contributed to Uber’s profitability.
Uber eliminated more than 3,500 jobs in 2020, and executives have since worked to improve its cost structure. For example, they reduced the cost of deliveries. Uber reported net income of $221 million on $9.29 billion in revenue in the third quarter, and in the past four quarters altogether, it generated over $1 billion in profit.
According to S&P’s rules, members of the index must have positive earnings in the most recent quarter and over the prior four quarters in total. Constituents of the index must have an adjusted market cap of at least $14.5 billion.
Uber has a market cap of about $118 billion, while the median market cap of companies in the S&P 500 is just over $31 billion.
Price Momentum
UBER is trading near the top of its 52-week range and above its 200-day simple moving average.
What does this mean?
Investors have been pushing the share price higher, and the stock still appears to have upward momentum. This is a positive sign for the stock's future value.
1. Uber is joining the S&P 500, according to an announcement late Friday.
2. The ride-hailing company generated positive earnings in the latest quarter and over $1 billion in profit in the last four periods.
3. Uber has a market cap of about $118 billion, while the median market cap of companies in the S&P 500 is just over $31 billion.
Uber shares rose 5% in extended trading on Friday after the ride-hailing company was added to the S&P 500 Index, replacing Sealed Air Corp.
The change will take place prior to the open of trading on Monday, Dec. 18, according to a press release.
A company’s stock price often rises on news that it’s joining the S&P 500 because fund managers who track the benchmark, which gets updated each quarter, have to acquire the shares. Companies also have to meet certain valuation and profitability requirements.
Uber shares debuted on the New York Stock Exchange in 2019, but the company was burning cash as it had to pay drivers enough money to stay competitive in a low-margin business. Its preferred metric was adjusted earnings before interest, tax, depreciation and amortization, or EBITDA.
Most of Uber’s adjusted EBITDA comes from mobility, but the company made its delivery business profitable faster than planned, after recession-fearing investors became more averse to investing in money-losing companies. Growing advertising revenue has also contributed to Uber’s profitability.
Uber eliminated more than 3,500 jobs in 2020, and executives have since worked to improve its cost structure. For example, they reduced the cost of deliveries. Uber reported net income of $221 million on $9.29 billion in revenue in the third quarter, and in the past four quarters altogether, it generated over $1 billion in profit.
According to S&P’s rules, members of the index must have positive earnings in the most recent quarter and over the prior four quarters in total. Constituents of the index must have an adjusted market cap of at least $14.5 billion.
Uber has a market cap of about $118 billion, while the median market cap of companies in the S&P 500 is just over $31 billion.
Price Momentum
UBER is trading near the top of its 52-week range and above its 200-day simple moving average.
What does this mean?
Investors have been pushing the share price higher, and the stock still appears to have upward momentum. This is a positive sign for the stock's future value.
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