Uber Q1 earnings: what to watch for Uber Mobility, Uber Eats and Uber Freight?

When is the report date?

Uber Technologies is expected to report earnings on May 04, 2022 after market close. The report will be for the fiscal Quarter ending Mar 2022.

What to expect?

According to Zacks Investment Research, based on 11 analysts' forecasts, the consensus EPS forecast for the quarter is -$0.28. The reported EPS for the same quarter last year was -$0.57.

It's worth noting that in early March, Uber upgraded its Q1 guidance: lifting its EBITDA forecast from a range of $100 - 130 million to $130 - 150 million, a 15% - 30% increase. The revision is based on the fact that February was a record month for the delivery division, and mobility bookings also showed great improvement as to reach 95% of the pre-pandemic level. As such, it should be safe to anticipate that the Q1 results will represent a strong recovery for demand of Uber's services.

What to watch for Uber’s three key business unit

Mobility, delivery and freight are the three key units under the Uber Technologies umbrella. Overall, Uber website traffic has shown a convincing uptrend for delivery demand during the first quarter: total estimated visits on all devices are up 66.99% from the previous quarter and 133.22% from the same period last year.

Mobility

The mobility trends are highly encouraging. For Q4, US mobility bookings bounced back to 90% of 2019 levels and the figure is forecast to continue to be up to 95% in the March quarter. For the foreseeable future, it is reasonable to anticipate that demand for mobility will return to the same size before the pandemic or even higher, given the coming summer and holiday season.

Delivery

The company’s delivery segment, which includes Uber Eats, has been boosted substantially during the pandemic, the revenue for this segment has more than tripled during the past two years and has become the largest revenue generator for Uber.

Although the food-delivery service has become a part of regular life, the arrival of the endemic phase is opening the door to more alternatives for people’s dining choices. Hence, the growth rate for this division is unlikely to maintain the high double-digit pace that we have seen before and a flattening growth curve is more reasonable to expect.

Freight

Q4 2021 revenue includes contributions from the acquisition of Transplace. Independence from the centralized Uber structure, the new operation of the Uber Freight will carry the ability to take advantage of business-to-business logistics opportunities. While the integration of the two businesses remains at the early stage, the key watch will focus on the operation synergy and cross-customer opportunities that the new structure will bring. Moreover, as an energy-heavy industry, the impact of rising transportation costs will be the other key question to answer in the upcoming earnings season.

Technical analysis

Uber’s share price has been skewed into the downturn tunnel from last October, which has sent the price back to the level back in 2020. Current support can be seen around $31 while the pressure is coming from the 20 and 50-days moving average. This level was also the starting line for Uber to race towards its peak.

In the event of a bounce back—if the earnings are welcomed by the investors, there are some key hurdles that need to be clear before a reversal can be confirmed. The 20-days line will be the first challenge for the price before facing the 100-days MA. Then, a step above, the ceiling of the moving trajectory, which also fits perfectly into the descending trend line from the hill-top, will be a vital target to fight for.

Client Sentiment

IG client sentiment shows that a vast majority of investors are optimistic about Uber’s stock—91% of IG clients expect the price to rise. Professional brokers also have exceptional high-level confidence in the company as out of 45 brokers, 86% of them ranked Uber as a “strong-buy” or “buy.”

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