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Can UBER Deliver a Beat in Q1 Earnings Despite Omicron Woes?

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Uber Technologies (UBER - Free Report) is scheduled to report first-quarter 2022 earnings numbers on May 4, after market close.

The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 126.4%.

Let’s see how things are shaping up for Uber this earnings season.

Uber Technologies, Inc. Price and EPS Surprise

Uber Technologies, Inc. Price and EPS Surprise

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

Factors to Note

Higher online order volumes are expected to get reflected in Uber’s delivery gross bookings in the to-be-reported quarter. The Zacks Consensus Estimate for Delivery gross bookings indicates a rise of 2.7% from the sequential quarter’s reported number. Strong performance of the Delivery segment is expected to have boosted the company’s top line in the first quarter.

However, Omicron-induced softness in mobility demand is expected to have hurt Mobility gross bookings and revenues on a sequential basis. The Zacks Consensus Estimate for Mobility gross bookings hints at a decline of 8.8% from the fourth-quarter 2021 reported figure. The same for Mobility revenues suggests a 4.9% decrease from the fourth-quarter 2021 reported number. Uber expects the negative impact on Mobility gross bookings to affect first-quarter gross bookings by $1 billion-$1.2 billion.

Nevertheless, with strong improvement in mobility demand (ride trips recovered 90% in February from the 2019 level, while gross bookings were just 5% below the February 2019 level) on a year-over-year basis and continued rise in delivery demand, Uber expects total gross bookings to be $25 billion-$26 billion in the soon-to-be-reported quarter, indicating a rise of 28-33% from the year-ago period.

Improvement in mobility demand and strong delivery gross bookings are expected to have boosted UBER’s adjusted EBITDA in the first quarter. The company expects adjusted EBITDA of $130-$150 million in the to-be-reported quarter compared with $86 million reported in the fourth quarter of 2021.

High sales and marketing expenses, as well as costs associated with paying incentives to drivers due to business model changes in some countries, are likely to have hurt Uber’s bottom line in the first quarter.

What the Zacks Model Unveils

The proven Zacks 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 +0.65%. 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 Q4 Earnings

Uber reported fourth-quarter 2021 earnings of 44 cents per share against the Zacks Consensus Estimate of a loss of 33 cents. Total revenues of $5,778 million surpassed the Zacks Consensus Estimate of $5,391.2 million. The top line jumped 82.6% from the year-ago period (improved 19.3% sequentially), primarily due to a rebound in mobility operations and profits at the Delivery segment.

Other Stocks to Consider

Investors interested in the broader Computer and Technology sector may also consider ACM Research (ACMR - Free Report) and Arlo Technologies (ARLO - Free Report) . These companies also possess the right combination of elements to beat on earnings in this reporting cycle.

ACM Research has an earnings ESP of +44.44% and a Zacks Rank #3. The company will announce first-quarter 2022 results on May 6.

ACM Research’s earnings have surpassed the Zacks Consensus Estimate in three of the preceding four quarters, while missing the same in one. The average beat was 55.7%.

Arlo Technologies has an earnings ESP of +33.33% and a Zacks Rank #3. The company is slated to release first-quarter results on May 10.

Arlo Technologies’ earnings have surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 108.8%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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