Insider Buying

Insider Buying Report: Uber Technologies Inc (UBER:US)

Uber Technologies Inc
(UBER:US)
12 months:
-48.66%
Activity:
Bullish
Pattern:
Large purchase from CEO
News:
Q1 results
Uber Technologies Inc
(UBER:US)
12 months:
-48.66%
Activity:
Bullish
Pattern:
Large purchase from CEO
News:
Q1 results

A CEO has deeper insight into their company’s operations than any outside analyst or fund manager could ever hope to obtain. If they’re buying company stock, it’s often worth taking a closer look.

In this report, we are going to highlight an interesting CEO purchase at Uber Technologies Inc (UBER:US). Uber is an American technology company that provides mobility and food delivery services. A global business, it operates in over 70 countries and 10,000 cities worldwide. The company is listed on the New York Stock Exchange and currently has a market capitalization of $47.89 billion.

Uber Technologies Inc: Insider Buying

Our data shows that on May 6, CEO Dara Khosrowshahi bought 200,000 Uber shares at a price of $26.73 per share. This trade cost the insider approximately $5.3 million and increased his holding to 1.421 million shares.

Large Purchase

This insider transaction caught our attention due to its size. The fact that the CEO has spent over $5 million on stock, and increased his stake by 16%, suggests that he is confident the stock is set to move higher.

It’s worth noting that this is not the only large purchase from Mr. Khosrowshahi recently. Back in November 2021, he spent $9.0 million on stock when it was trading near $45. This means that the insider has spent approximately $14.3 million on Uber stock in the space of around six months. Clearly, he believes that the market is not appreciating the future potential here.

Solid Q1 Results

Uber recently posted a solid set of Q1 results that were ahead of estimates.

For the period, gross bookings were $26.4 billion, up 35% year-over-year, and above the high-end of the guidance range. Meanwhile, revenue was up 136% year on year to $6.9 billion, easily beating the consensus forecast of $6.1 billion. Adjusted loss per share was 18 cents versus the consensus estimate of a loss of 24 cents per share.

Since the results, Uber’s share price has continued to decline on the back of fears over rising costs. Recently, rival Lyft said that it would have to spend more to hire and retain drivers.

However, Uber has plans to cut costs by scaling back hiring and reducing expenditure on its marketing and incentive activities. Mr. Khosrowshahi said the cost cuts were a necessary response to the "seismic shift" in investor sentiment.

"The least efficient marketing and incentive spend will be pulled back. We will treat hiring as a privilege and be deliberate about when and where we add headcount," he said.

Uber will now also focus on achieving profitability on a free cash flow basis, rather than on an EBITDA basis.

Clearly, Mr. Khosrowshahi believes these moves will have a positive impact on the share price at some stage in the future. Given the size of his latest purchase, we see the trade as a bullish indicator.

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