Uber is not getting a five-star rating right now.
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The company posted its largest loss ever in a quarterly report exceeding $5 billion in the three months - leaving some investors to question whether the ride-hailing giant can turn a profit.
Neuberger Berman, senior research analyst Daniel Flax, told FOX Business Uber needs to balance its growth while improving its margins and cash flow.
“We see an opportunity here with Uber, but this remains a story where execution is critical,” he said on “The Claman Countdown” Friday.
Uber booked 1.68 billion rides and food deliveries for the quarter, beating analysts’ expectations.
Flax said he expects Uber to remain aggressive with near-term investment, but the importance of constant innovation remains a challenge for the ride-sharing company.
“If the company is able to execute on the growth drivers and ultimately make an improvement in terms of how cash they burn over the next few years…I do think they can eventually make money,” he said.
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Flax added Uber’s ability to become a profitable company is going to be predicated on balancing the investment decisions.
“They are going to make mistakes. They are going to make a lot of mistakes along the way, but can they learn from those mistakes and with innovation deliver value to customers?"
Uber increased its customers, adding a reported 100 million monthly active riders for the first time.
Flax said the ridership data indicate the high demand for Uber, but its execution strategy will be crucial to the company’s quarterly growth.