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Can UBER Deliver a Beat in Q2 Earnings on Mobility Recovery?

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Uber Technologies (UBER - Free Report) is scheduled to report second-quarter 2021 earnings numbers on Aug 4, after market close.

Let’s take a look at factors that are expected to have influenced the company’s second-quarter performance.

With uptick in ride volumes, thanks to easing coronavirus-led restrictions, Uber’s Mobility segment is expected to reflect improvement both sequentially as well as on a year-over-year basis. The Zacks Consensus Estimate for Mobility gross bookings indicates a 23.5% rise from the first-quarter 2021 reported figure. The same suggests a more than 100% surge from the figure reported in second-quarter 2020 when Uber’s ride hailing operations hit rock-bottom as rising coronavirus cases confined most people to their homes. Given the anticipated improvement in gross bookings, the consensus mark for Mobility revenues in the second quarter hints at a more than 100% rise each, from the sequential as well as the year-ago reported number.
 
However, the Mobility unit’s performance might have been partly hurt by Uber’s investments in drivers to cater to the increase in demand. The company expects the increased spending during the second quarter to have put pressure on mobility take rates and adjusted EBITDA. It estimates mobility take rates to decline around 20% sequentially in the second quarter.

Uber’s delivery operations are booming, with online order volumes surging amid the pandemic. This is expected to get reflected in the unit’s gross bookings and revenues. The Zacks Consensus Estimate for Delivery gross bookings hints at a 72.5% jump from the year-ago reported number. The same for Delivery revenues shows an approximate 40% rise from the second-quarter 2020 reported figure.

The company’s focus on financial discipline and its cost-containment measures are expected to have helped narrow down adjusted EBITDA loss, as was the case in the previous quarters.

Uber Technologies, Inc. Price and EPS Surprise

Uber Technologies, Inc. Price and EPS Surprise

Uber Technologies, Inc. price-eps-surprise | Uber Technologies, Inc. Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Uber this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Uber has an Earnings ESP of +0.53% as the Most Accurate Estimate is pegged at 53 cents, narrower than the Zacks Consensus Estimate of a loss of 54 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Uber carries a Zacks Rank #3.

Highlights of Q1 Earnings

Uber incurred a loss (excluding 36 cents from non-recurring items) of 42 cents per share in the first quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of 56 cents. The amount of loss also narrowed year over year. Total revenues of $2,903 million missed the Zacks Consensus Estimate of $3,246.7 million and also declined year over year due to coronavirus-led weakness in the ride-hailing segment.

Other Stocks to Consider

Investors interested in the broader Computer and Technology sector may also consider Arista Networks (ANET - Free Report) , Etsy (ETSY - Free Report) and Motorola Solutions (MSI - Free Report) , as these stocks possess the right combination of elements to beat on earnings this reporting cycle as well.

Arista Networks has an Earnings ESP of +0.90% and a Zacks Rank #3. The company will release second-quarter 2021 earnings numbers on Aug 2.

Etsy has an Earnings ESP of +12.95% and a Zacks Rank #3. The company is set to report second-quarter 2021 results on Aug 4.

Motorola has an Earnings ESP of +0.59% and a Zacks Rank #3. The company is scheduled to report second-quarter 2021 financial numbers on Aug 5.