We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
UBER to Slash Marketing & Incentive Costs, Reduce Hiring
Read MoreHide Full Article
Uber Technologies (UBER - Free Report) plans to reduce spending and slow down hiring due to a “seismic shift” in investor sentiment, according to an email seen by CNBC, which was addressed to UBER staff by CEO Dara Khosrowshahi.
In order to serve its shareholders and their long-term interests better, the company aims to make its business model leaner by cutting down expenses on marketing and incentive. “The least efficient marketing and incentive spend will be pulled back,” Khosrowshahi wrote in the email to staff. The email further stated that the company will “treat hiring as a privilege” and be deliberate about when it adds workers.
Per the email, Uber, carrying a Zacks Rank #3 (Hold), will now focus on achieving profits on a free cash flow basis instead of adjusted EBITDA. The company has set a target to achieve adjusted EBITDA of $5 billion in 2024.
In its recently released first-quarter 2022 earnings report, Uber said that its free cash flow is approaching break even and that the company expects positive free cash flow for the full year. Recovery in Mobility operations, continued growth in Delivery segment and higher revenues at the Freight segment (thanks to the acquisition of Transplace) drove UBER’s first-quarter performance.
Uber’s rival Lyft (LYFT - Free Report) , carrying a Zacks Rank #3, reported strong first-quarter results owing to an increase in Active Riders (riders who take at least one ride during a quarter on Lyft’s multimodal platform through its app) and Revenue per Active Rider.
For the second quarter, Lyft expects revenues of $950 million-$1 billion, which indicates a sequential rise of 9-14%. However, due to increased investments in drivers and marketing, the company estimates adjusted EBITDA to be only $10 million-$20 million in the second quarter.
Image: Bigstock
UBER to Slash Marketing & Incentive Costs, Reduce Hiring
Uber Technologies (UBER - Free Report) plans to reduce spending and slow down hiring due to a “seismic shift” in investor sentiment, according to an email seen by CNBC, which was addressed to UBER staff by CEO Dara Khosrowshahi.
In order to serve its shareholders and their long-term interests better, the company aims to make its business model leaner by cutting down expenses on marketing and incentive. “The least efficient marketing and incentive spend will be pulled back,” Khosrowshahi wrote in the email to staff. The email further stated that the company will “treat hiring as a privilege” and be deliberate about when it adds workers.
Per the email, Uber, carrying a Zacks Rank #3 (Hold), will now focus on achieving profits on a free cash flow basis instead of adjusted EBITDA. The company has set a target to achieve adjusted EBITDA of $5 billion in 2024.
Uber Technologies, Inc. Price
Uber Technologies, Inc. price | Uber Technologies, Inc. Quote
In its recently released first-quarter 2022 earnings report, Uber said that its free cash flow is approaching break even and that the company expects positive free cash flow for the full year. Recovery in Mobility operations, continued growth in Delivery segment and higher revenues at the Freight segment (thanks to the acquisition of Transplace) drove UBER’s first-quarter performance.
Uber’s rival Lyft (LYFT - Free Report) , carrying a Zacks Rank #3, reported strong first-quarter results owing to an increase in Active Riders (riders who take at least one ride during a quarter on Lyft’s multimodal platform through its app) and Revenue per Active Rider.
For the second quarter, Lyft expects revenues of $950 million-$1 billion, which indicates a sequential rise of 9-14%. However, due to increased investments in drivers and marketing, the company estimates adjusted EBITDA to be only $10 million-$20 million in the second quarter.
A Key Picks
A better-ranked stock within the broader Computer and Technology sector is Analog Devices (ADI - Free Report) , which carries a Zacks Rank #2 (Buy). The company has a stellar earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being approximately 6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Analog Devices have gained 6.3% in a year.