It has been about a month since the last earnings report for Uber Technologies (UBER). Shares have added about 1.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Uber due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Uber Incurs Loss in Q3, Revenues Beat
Uber Technologies incurred a loss of 61 cents per share in the third quarter of 2022, wider than the Zacks Consensus Estimate of a loss of 17 cents. In third-quarter 2021, Uber reported earnings of 23 cents per share.
Total revenues of $8,343 million outperformed the Zacks Consensus Estimate of $8,076.5 million. The top line jumped 72% year over year, backed by contribution from the acquisition of Transplace by Uber Freight and change in the business model for the company’s UK Mobility business.
In the reported quarter, majority (60%) of the company’s revenues came from Mobility. Revenues from this segment jumped 73% year over year to $3,822 million. Revenues from the Delivery segment increased 24% year over year to $2,770 million. Freight revenues climbed to $1,751 million from $402 million in the year-ago period, thanks to the acquisition of Transplace.
Total revenues soared 89% year over year to $5,000 million in the United States and Canada. While revenues increased 33% to $518 million in Latin America, the same skyrocketed 77% to $1,878 million in Europe, the Middle East and Africa. Revenues rose 27% to $947 million in the Asia-Pacific region. Monthly active platform consumers jumped 14% to 124 million.
Adjusted EBITDA in the third quarter was $516 million compared with adjusted EBITDA of $8 million in the year-ago period. Total costs and expenses surged 63.2% year over year to $8,838million.
Gross bookings from Mobility improved 38% to $13,684 million. Gross bookings from Delivery augmented by 7% to $13,684 million. Gross bookings from Freight increased to $1,751 million in the third quarter from $402 million in the year-ago quarter. Total gross bookings ascended 26% to $29,119 million.
Uber exited the third quarter with cash and cash equivalents of $4,865 million compared with $4,397 million at the end of June 2022. Long-term debt, net of current portion at the end of the reported quarter, was $9,268 million compared with $9,271 million at June 2022-end.
Operating cash flow came in at $432 million compared with $614 million in the year-ago quarter. The free cash flow was $358 million compared with $524 million in the year-ago quarter.
For the fourth quarter, Uber expects gross bookings of $30 billion-$31 billion. Adjusted EBITDA is estimated to be $600 million-$630 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -34.18% due to these changes.
Currently, Uber has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Uber has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Uber is part of the Zacks Internet - Services industry. Over the past month, Shopify (SHOP), a stock from the same industry, has gained 22%. The company reported its results for the quarter ended September 2022 more than a month ago.
Shopify reported revenues of $1.37 billion in the last reported quarter, representing a year-over-year change of +21.6%. EPS of -$0.02 for the same period compares with $0.08 a year ago.
Shopify is expected to post break-even earnings per share for the current quarter, representing a year-over-year change of -100%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.9%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Shopify. Also, the stock has a VGM Score of F.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report