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What's in the Offing for Uber (UBER) This Earnings Season?

Zacks Equity Research

Uber Technologies UBER, which went public on May 10, is scheduled to report third-quarter 2019 results on Nov 4, after market close.

The Zacks Consensus Estimate for the September quarter is currently pegged at a loss of 83 cents, indicating a deterioration from the consensus mark of a loss of 82 cents 30 days ago. Given this backdrop, let’s delve into the factors that might have influenced the company’s performance in the said period.

Factors at Play

Alike the first two quarters of 2019, high costs are likely to have impacted Uber’s third-quarter 2019 performance as well. With Uber spending significantly on promotions and driver incentives to cope with competition from rivals like Lyft LYFT for higher market share, escalating costs are expected to get reflected in the company’s bottom-line results.

Debts are also likely to have deteriorated in the September quarter. In a bid to cut costs and improve efficiencies, Uber trimmed its workforce in July and September. As a result, the surge in costs might have been mitigated to some extent.

Moreover, the Core Platforms unit is likely to have performed well on the back of upbeat ridesharing revenues. Impressive performances in the key markets of the United States, Canada, Europe and the Asia Pacific might have led to an uptick in ridesharing revenues in the September quarter. Additionally, gross bookings are expected to have increased at Uber’s Core Platforms and Other Bets divisions. Strong progress at Uber’s food delivery business, Uber Eats, is also likely to have boosted results at the Core Platforms division.

Highlights of Q2 Results

In the last reported quarter, Uber incurred loss of $4.72 per share, wider than the Zacks Consensus Estimate of a loss of $3.33. Moreover, the amount of loss increased year over year with total expenses soaring 71% year over year.

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 -3.61%.

Zacks Rank: Uber carries a Zacks Rank #3, which increases the predictive power of ESP.

Stocks to Consider

Here are some companies with the right combination of elements to beat on earnings in their upcoming releases.

Advanced Energy Industries AEIS has an Earnings ESP of +4.17% and a Zacks Rank of 1. The company will announce third-quarter financial results on Nov 12. You can see the complete list of today’s Zacks #1 Rank stocks here.

Zillow Group ZG is a Zacks #3 Ranked company and has an Earnings ESP of +5.09%. The company will announce third-quarter financial results on Nov 7.

 

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