It has been about a month since the last earnings report for Uber Technologies (UBER). Shares have lost about 7.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Uber due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Uber Incurs Loss in Q1, Revenues Beat
Uber Technologies incurred an adjusted loss of 18 cents per share in the first quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 27 cents. The bottom-line improved year over year.
Total revenues of $6,854 million also outperformed the Zacks Consensus Estimate of $6,202 million. The top line jumped more than 100% year over year (improved 18.6% sequentially), primarily due to the November 2021 acquisition of Transplace and easy year-over-year comparison (due to the accrual for historical claims in the United Kingdom in the first quarter of 2021).
Adjusted EBITDA in the first quarter was $168 million against adjusted EBITDA loss of $359 million in the year-ago period. The upside was due to significant improvement in Mobility adjusted EBITDA and the Freight segment reaping profits on an adjusted EBITDA basis. At the Delivery segment, adjusted EBITDA was $30 million against adjusted EBITDA loss of $200 million in the year-ago quarter.
Uber incurred a net loss of $5,930 million in the first quarter against net loss of $108 million in the year-ago period. This can be attributed to a $5.6-billion headwind related to unrealized losses on UBER’s equity investments.
In the first quarter, majority (36.7%) of the company’s revenues came from Mobility. Revenues from this segment jumped more than 100% year over year to $2,518 million as ride volumes continued to rebound. Revenues from the Delivery segment increased 44% year over year to $2,512 million, owing to a surge in online order volumes. Freight revenues climbed to $1,824 million from $301 million in the year-ago period, thanks to the acquisition of Transplace.
Total revenues soared more than 100% year over year to $4,562 million in the United States and Canada. While revenues increased 43% to $432 million in Latin America, the same skyrocketed more than 400% to $1,127 million in Europe, the Middle East and Africa. Revenues rose 39% to $733 million in the Asia-Pacific region. Monthly active platform consumers jumped 17% to 115 million.
Gross bookings from Mobility improved 58% to $10,723 million. Gross bookings from Delivery augmented 12% to $13,903 million. Gross bookings from Freight surged $1,823 million in the first quarter from $302 million in the year-ago quarter. Total gross bookings ascended 35% to $26,449 million.
Cost of revenues (adjusted) increased significantly year over year due to the classification of certain Delivery and Mobility payments associated with business model changes in some countries. The acquisition of Transplace also contributed to the rise in cost of revenues. Total costs and expenses surged 65.7% year over year to $7,336 million, with sales and marketing expenses rising 14.5%.
Uber exited the first quarter with cash and cash equivalents of $4,184 million compared with $4,295 million at the end of 2021. Long-term debt, net of current portion at the end of the quarter, was $9,273 million compared with $9,276 million at December 2021-end.
Q2 Guidance
For the second quarter, Uber expects gross bookings of $28.5 billion-$29.5 billion. Adjusted EBITDA is estimated to be $240 million-$270 million. With free cash flow approaching break even, the company expects positive free cash flow for the full year.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted -5.76% due to these changes.
VGM Scores
At this time, Uber has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Uber has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Uber belongs to the Zacks Internet – Services industry. Another stock from the same industry, Alphabet (GOOGL), has gained 1% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.
Alphabet reported revenues of $56.02 billion in the last reported quarter, representing a year-over-year change of +22.9%. EPS of $24.62 for the same period compares with $26.29 a year ago.
For the current quarter, Alphabet is expected to post earnings of $26.55 per share, indicating a change of -2.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.5% over the last 30 days.
Alphabet has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
Zacks’ Top Picks to Cash in on Electric Vehicles
Big money has already been made in the Electric Vehicle (EV) industry. But, the EV revolution has not hit full throttle yet. There is a lot of money to be made as the next push for future technologies ramps up. Zacks’ Special Report reveals 5 picks investors
See 5 EV Stocks With Extreme Upside Potential >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report