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Will UBER's Q1 Earnings Disappoint on Mobility Weakness?

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Uber Technologies UBER is scheduled to report first-quarter 2021 earnings numbers on May 5, after market close.

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

Ride volumes are expected to have improved sequentially in the first quarter, thanks to increased vaccinations in the United States and relaxation in coronavirus-induced restrictions. Notably, in March, the Mobility segment (ride-hailing unit) crossed $30 billion in annualized gross bookings run-rate and its average daily gross bookings increased 9% month over month. This was the unit’s best performance in a year. Despite this improvement, ride volumes continue to be significantly below the pre-pandemic levels. This weakness is likely to reflect in Mobility gross bookings and revenues. The Zacks Consensus Estimate for Mobility gross bookings suggests an approximate 40% decline from the year-ago reported number. The same for Mobility revenues indicates a 42.2% drop from the year-ago reported levels.

However, Uber’s Delivery business, which has been booming since 2020, is expected to have put up a strong performance in the first quarter. The segment has been experiencing a surge in online order volumes from homebound customers. The Zacks Consensus Estimate for Delivery gross bookings hints at a jump of more than 100% from the year-ago reported number. The same for Delivery revenues shows an 80.7% rise from first-quarter 2020’s reported figure.

Additionally, Uber’s cost-cutting measures are expected to have supported its bottom line. Reduction in sales and marketing costs, and research and development expenses, is likely to have helped narrow the company’s adjusted EBITDA losses in the to-be-reported quarter.

Uber Technologies, Inc. Price and EPS Surprise

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 Zacks model does not conclusively predict a beat for Uber this earnings season. 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. However, that is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Uber has an Earnings ESP of -9.37% as the Most Accurate Estimate is pegged at a loss of 62 cents, wider than the Zacks Consensus Estimate of a loss of 56 cents.

Zacks Rank: Uber carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Highlights of Q4 Earnings

Uber incurred a loss of 54 cents per share in the fourth quarter of 2020, wider than the Zacks Consensus Estimate of a loss of 53 cents. However, the loss narrowed by 15.6% year over year. Meanwhile, total revenues of $3,165 million missed the Zacks Consensus Estimate of $3,576.1 million. The top line dropped 22.2% year over year due to weakness in the ride-hailing segment, thanks to coronavirus keeping most people homebound.

Stocks to Consider

Investors interested in the broader Computer and Technology sector may consider AMETEK AME, ANSYS ANSS and TMobile US TMUS, as these stocks possess the right combination of elements to beat on earnings this reporting cycle.

AMETEK has an earnings ESP of +0.49% and a Zacks Rank #2. The company will release first-quarter 2021 earnings numbers on May 4.

ANSYS has an earnings ESP of +7.42% and a Zacks Rank #3. The company will announce first-quarter 2021 results on May 5.

TMobile has an earnings ESP of +20.88% and a Zacks Rank #3. The company is set to release first-quarter 2021 earnings on May 4.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

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AMETEK, Inc. (AME) : Free Stock Analysis Report

ANSYS, Inc. (ANSS) : Free Stock Analysis Report

TMobile US, Inc. (TMUS) : Free Stock Analysis Report

Uber Technologies, Inc. (UBER) : Free Stock Analysis Report

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