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Uber set to join the S&P 500 index in latest sign of a turnaround for the ride-hailing service – Metro US

Uber set to join the S&P 500 index in latest sign of a turnaround for the ride-hailing service

APEC CEO Summit
Uber CEO Dara Khosrowshahi, CEO, participates in a session during the APEC CEO Summit Wednesday, Nov. 15, 2023, in San Francisco. (AP Photo/Eric Risberg)

LOS ANGELES (AP) — Uber’s stock is set to join the S&P 500 index later this month, the latest sign that the ride-hailing and delivery company is turning its business around after struggling through much of the pandemic.

The San Francisco company will be added to the benchmark index prior to the opening of regular trading on Dec. 18, S&P Dow Jones Indices said late Friday.

Inclusion in the S&P 500 can be a big boost for a stock because the index is widely tracked by many funds designed to mirror the holdings of the S&P 500, which is at the heart of many 401(k) accounts. That translates into more demand for stocks in the index, driving up their price.

Shares in Uber Technologies Inc. rose 2% Monday to close at $58.63. That’s not far from their all-time high of $63.18 per share set in February 2021. The stock is up more than twofold so far this year.

The strong rally marks a major turnaround from as recently as the summer of 2022, when the stock was at $20.46.

The pandemic severely stymied Uber’s ride-hailing business as government lockdowns kept most people at home. The work-from-home trend continued to limit the need for anyone to summon a ride on Uber.

The company reacted to the pandemic by building up a then-nascent food-delivery division that has now become a major revenue driver.

Uber’s ride-hailing service, meanwhile, has since gradually bounced back. It is now handling more rides than it did in 2019, raising the company’s hopes that it may finally realize its long-term of goal of becoming consistently profitable.

It wasn’t until the third quarter when Uber qualified for inclusion in the S&P 500, with a trailing 12-month net income of $1.05 billion.

Uber has “established a multi-quarter track record of exceeding profitability guidance,” analysts at Wedbush noted in a research note Monday.