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Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The Zacks Consensus Estimate for third-quarter 2024 earnings was revised upward in the past 60 days. The estimate is pegged at 41 cents per share. Additionally, the consensus mark implies a massive 310% upsurge from the year-ago actuals. The Zacks Consensus Estimate for third-quarter 2024 revenues is pegged at $11 billion, suggesting an 18.4% uptick from the year-ago actuals.
Image Source: Zacks Investment Research
UBER, a leading ride-hailing company, has a mixed earnings surprise history, as reflected in the chart below.
Image Source: Zacks Investment Research
Earnings Whispers for Q3
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 odds of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
With economic activities returning to normal levels in the post-pandemic scenario, people are traveling to work and other places as before. UBER’s Mobility business has been seeing buoyant demand. With customer traffic picking up, gross bookings from the unit are likely to have been impressive. We expect gross bookings from the Mobility segment in the September-end quarter to grow 21% on a year-over-year basis.
Uber’s Delivery business is also expected to have performed well in the to-be-reported quarter. We expect gross bookings from the Delivery segment in the September quarter to grow 14.6% on a year-over-year basis.
Total trips are expected to soar 22.7% year over year in the third quarter, per our model. Freight revenues are likely to have suffered in the to-be-reported quarter due to a challenging freight market. Uber is focusing on autonomous vehicles to drive growth. The company is expected to provide updates on the same on the third-quarter conference call.
Price Performance & Valuation
On a year-to-date basis, UBER shares have gained 26.1%, outperforming the industry. The company’s shares have outperformed rival Lyft (LYFT - Free Report) but underperformed fellow industry player DoorDash (DASH - Free Report) in the same timeframe.
YTD Price Comparison
Image Source: Zacks Investment Research
From a valuation perspective, UBER is trading at a discount compared with the industry based on its price/sales ratio. The company is trading at a forward sales multiple of 3.30 compared with its industry’s 5.87. The reading is also below its median of 3.02 over the last five years.
Image Source: Zacks Investment Research
Investor Considerations
Diversification is imperative for big companies to reduce risks, and UBER has excelled in this area. It has engaged in numerous acquisitions, geographic and product diversifications, and innovations. Uber’s endeavors to expand into international markets are commendable and provide it with the benefits of geographical diversification. Prudent investments enable it to extend its services and solidify its comprehensive offerings.
Even though Uber’s primary business is ride-sharing, it has diversified into food delivery and freight over time. Both its ride-sharing and delivery platforms are growing in popularity. This is generating strong demand, which, along with growth initiatives and continued cost discipline, is driving the company’s results.
However, the performance of the Freight unit due to the slowdown in freight demand is concerning. Additionally, Uber has been grappling with labor unrest for some time. We are also concerned about its high debt levels.
Long-Term Debt to Capitalization
Image Source: Zacks Investment Research
Final Thoughts
We can safely conclude that investors should refrain from rushing to buy UBER, which is facing quite a few challenges ahead of its earnings release on Oct. 31. Instead, they should monitor the stock’s developments closely for a more appropriate entry point as an erroneous and hasty decision could affect portfolio gains. UBER’s current Zacks Rank supports our thesis.
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UBER Set to Report Q3 Earnings: Buy, Sell or Hold the Stock?
Uber Technologies (UBER - Free Report) is set to report third-quarter 2024 results on Oct. 31, before market open.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The Zacks Consensus Estimate for third-quarter 2024 earnings was revised upward in the past 60 days. The estimate is pegged at 41 cents per share. Additionally, the consensus mark implies a massive 310% upsurge from the year-ago actuals. The Zacks Consensus Estimate for third-quarter 2024 revenues is pegged at $11 billion, suggesting an 18.4% uptick from the year-ago actuals.
UBER, a leading ride-hailing company, has a mixed earnings surprise history, as reflected in the chart below.
Earnings Whispers for Q3
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 odds of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
UBER has an Earnings ESP of -7.02% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Shape UBER’s Q3 Results
With economic activities returning to normal levels in the post-pandemic scenario, people are traveling to work and other places as before. UBER’s Mobility business has been seeing buoyant demand. With customer traffic picking up, gross bookings from the unit are likely to have been impressive. We expect gross bookings from the Mobility segment in the September-end quarter to grow 21% on a year-over-year basis.
Uber’s Delivery business is also expected to have performed well in the to-be-reported quarter. We expect gross bookings from the Delivery segment in the September quarter to grow 14.6% on a year-over-year basis.
Total trips are expected to soar 22.7% year over year in the third quarter, per our model. Freight revenues are likely to have suffered in the to-be-reported quarter due to a challenging freight market. Uber is focusing on autonomous vehicles to drive growth. The company is expected to provide updates on the same on the third-quarter conference call.
Price Performance & Valuation
On a year-to-date basis, UBER shares have gained 26.1%, outperforming the industry. The company’s shares have outperformed rival Lyft (LYFT - Free Report) but underperformed fellow industry player DoorDash (DASH - Free Report) in the same timeframe.
YTD Price Comparison
From a valuation perspective, UBER is trading at a discount compared with the industry based on its price/sales ratio. The company is trading at a forward sales multiple of 3.30 compared with its industry’s 5.87. The reading is also below its median of 3.02 over the last five years.
Investor Considerations
Diversification is imperative for big companies to reduce risks, and UBER has excelled in this area. It has engaged in numerous acquisitions, geographic and product diversifications, and innovations. Uber’s endeavors to expand into international markets are commendable and provide it with the benefits of geographical diversification. Prudent investments enable it to extend its services and solidify its comprehensive offerings.
Even though Uber’s primary business is ride-sharing, it has diversified into food delivery and freight over time. Both its ride-sharing and delivery platforms are growing in popularity. This is generating strong demand, which, along with growth initiatives and continued cost discipline, is driving the company’s results.
However, the performance of the Freight unit due to the slowdown in freight demand is concerning. Additionally, Uber has been grappling with labor unrest for some time. We are also concerned about its high debt levels.
Long-Term Debt to Capitalization
Final Thoughts
We can safely conclude that investors should refrain from rushing to buy UBER, which is facing quite a few challenges ahead of its earnings release on Oct. 31. Instead, they should monitor the stock’s developments closely for a more appropriate entry point as an erroneous and hasty decision could affect portfolio gains. UBER’s current Zacks Rank supports our thesis.