2023-07-31 15:00:04 ET
Uber Technologies ( NYSE: UBER ) is due to report earnings on August 1. The tech company is forecast to generate $9.34B in revenue for the quarter vs. $7.37B a year ago and report $0.23 in EPS vs. an EPS loss of $1.33 a year ago. Adjusted EBITA is forecast to jump to $844.5M from $761M in Q1. Total gross bookings of 33.5B are anticipated, and a gross margin rate of 40.2% is estimated. Monthly active platform consumers is estimated to be at $137M at the end of the quarter. Confidence in Uber ( UBER ) has increased in the last 90 days, with 27 out of the last 28 EPS revisions being to the upward side.
Ahead of the earnings print, Oppenheimer named Uber ( UBER ) one of its top sector picks, with the San Francisco-based company expected to continue to benefit from "Network Effects" as a super app, elevated spending on services/travel/entertainment, and return-to-work tailwinds. Analyst Jason Helfstein also pointed to strong trends. 3P data indicates better Q2 consumer time spent on Uber than DoorDash ( DASH ) or Lyft ( LYFT ), he noted. He also called out a higher share of new drivers for Uber ( UBER ) in comparison to Q1, improved take-rates, profitability, and Uber One membership driving cross-selling.
Another interesting angle with Uber Technologies ( UBER ) is possible index inclusion late in the year. Based on Oppenheimer's model, Uber ( UBER ) will be eligible during the December meeting to join the S&P 500 after achieving trailing twelve-month profitability in Q3. S&P inclusion has the potential to create more share demand, as well as attract new investors.
On valuation: "Our $65 target assumes 20x '25E EBITDA discounted 10%, implying 18.5x '25E EBITDA, in line with DASH vs. peers at 16x, which we believe is justified given 82%E higher '22–'25E EBITDA growth vs. peers (ABNB, DASH, ETSY, NFLX)."
Wedbush Securities turned more constructive on Uber ( UBER ) ahead of the report, with a price target boost to $52.00. "In the near-term, we see tailwinds for mobility demand stemming from the gradual return to in-office work, the recovery in corporate travel, and ongoing strength in leisure travel demand which has persisted MTD in July," previewed analyst Scott Devitt. The firm raised its adjusted EBITDA estimate by ~3% for 2023 and ~6% for 2024. The outlook for the amount of free cash flow to be churned up by Uber ( UBER ) was also raised.
While Wall Street analysts are strongly bullish on Uber (42 Buy-equivalent ratings, 4 Hold-equivalent ratings, and no Sell-equivalent ratings), Seeking Alpha analysts only have a consensus Hold rating on the stock. However, just ahead of earnings, Gary Alexander updated that it is a great time to bet on Uber ( UBER ) as the company proves its economies of scale can deliver both tremendous growth as well as bottom-line performance.
The Seeking Alpha Quant Rating on Uber ( UBER ) is also at Hold, due to low factor grades for valuation and profitability.
Shares of Uber ( UBER ) rose 1.75% in afternoon trading on Monday. The stock is up 93% on a year-to-date basis and trades very close to its 52-week high. Options trading on Uber ( UBER ) implies a post-earnings swing of 8% following the report. Uber soared 12% on the day of its last earnings dump.
More on Uber:
- Uber's track record of earnings beats and misses
- Relative strength index and moving averages on Uber
- Growth metrics on Uber
- Seeking Alpha's Quant Rating for Uber
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Uber Technologies earnings preview: Mobility tailwinds are expected to boost growth metrics