Jim Cramer on Uber: "I'd Be a Buyer Into Weakness"

Uber Technologies, Inc. (NYSE:UBER) is one of the latest stocks on Jim Cramer’s radar. Cramer had a lot of positive things to say about the company’s earnings, as he commented:

“What the heck just happened to the stock of Uber Technologies?… Even though I thought the quarter looked pretty darn good, Wall Street clearly disagrees with me… So let’s step back a second and think about Uber’s overall goals. They want to grow their market share, both ride-sharing and delivery. They want to grow engagement with their customers, encouraging cross-selling. And as part of their goal, they want to grow their Uber One Membership program, which comes with great benefits, and they want to do it all profitably.

They’re clearly making progress on each of these fronts. Uber’s growth is accelerating across both ride-sharing and food delivery, and management said customer engagement’s improving too, up 4% in the quarter. Better engagement is a huge positive for Uber because people who use both ride sharing and food delivery spend three times as much more with Uber and retain 35% better than users who only use one product. I think that’s pretty terrific… Management also seems pleased with the progression of Uber One, with those members much more likely to use both ride sharing and Eats.

As for the company’s profitability, sure, margins were a teeny tiny bit light this quarter, but Uber’s still making tons of money at this point. Adjusted earnings before interest, taxes, depreciation, and amortization still grew at a 33% clip year over year. So who really cares that it came in with a slight miss? I’ve gotta tell you, I usually don’t like to overlook that, but in this case I’m fine with it. Here’s the bottom line: As far as I’m concerned, Uber, which I was very concerned about… I wrote about it in the book; I didn’t want to be wrong for heaven’s sake. Uber’s doing better than I thought it was doing, and I think I gotta tell you, I think there’s not much to worry about, really.

The stock reacted negatively because Uber happened to report on a day with a tough tape and because of some slight misses for profit margins. But I love the revenue growth here, which is accelerating, I love the improved engagement, and I think the company’s focused on a clear strategy that it’s executing quite well. That’s why I don’t think there’s anything to worry about from the Uber quarter, and it’s why I’d be a buyer into weakness after today’s pullback and tomorrow’s uncertainty.”

Uber Technologies, Inc. (NYSE:UBER) operates technology platforms that connect users for mobility, delivery, and freight services. The company provides ridesharing, food and retail delivery, and digital freight logistics.

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Disclosure: None. This article is originally published at Insider Monkey.