Uber Earnings: What to Look For From UBER

Investing

Key Takeaways

  • Analysts estimate EPS of -$0.56 vs. -$1.71 in Q1 FY 2020.
  • Gross bookings are expected to rise YOY after three straight quarters of declines.
  • Revenue is expected to rise slightly as demand for ride-hailing services picks up.

Uber Technologies Inc. (UBER) is beginning to see demand for its ride-hailing service pick up after it was decimated by the COVID-19 pandemic during the past year. But the company is now facing the challenge of finding enough drivers to meet rising demand, which reached record levels in March. Frustrated customers are complaining about long wait times, and Uber has started offering greater incentives to attract more drivers.

Investors are likely to watch whether this surging demand positively impacts Uber’s financial results when the company reports earnings on May 5, 2021 for Q1 FY 2021. Analysts expect Uber to post its 12th consecutive quarterly loss per share, albeit much smaller than in the year-ago quarter. Revenue is expected to rise slightly after three quarters of declines.

Investors will also be focused on Uber’s gross bookings, a key metric indicating the total dollar amount generated by Uber’s combined ride-hailing, delivery, and freight-shipping businesses. Analysts are expecting gross bookings to rise year over year (YOY) after three straight quarters of declines.

Shares of Uber have dramatically outperformed the broader market over the past year. The stock’s performance gap with the rest of the market widened sharply in November as optimism over COVID-19 vaccine developments boosted investor confidence. Since the start of 2021, the stock’s price has been volatile but has continued to edge upward. Uber’s shares have provided a total return of 100.0% over the past year, well above the S&P 500’s total return of 47.5%.

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Source: TradingView.

Uber Earnings History

Uber’s stock reached a record high on Feb. 10, the same day it issued its Q4 FY 2020 earnings report. But it immediately plunged and continued to fall during the subsequent weeks. Uber reported a loss per share of $0.54, its 11th straight quarterly loss per share. Revenue fell 15.5%, marking the third straight quarter of decline. Even though Uber’s rides business was suffering amid the pandemic, the company said that its food delivery business was booming, and had doubled in size during the past year.

In Q3 FY 2020, Uber posted a loss per share of $0.62, continuing its streak of quarterly losses that began in the second quarter of FY 2018. Revenue fell 20.9%, making it just the second quarter in at least the past 11 during which revenue declined. The drop in revenue was mostly driven by declining ride-hailing revenue as people continued to shelter at home amid the pandemic. That decline was partially offset by a sharp increase in revenue for the delivery business.

Analysts expect some improvement in Uber’s financial results in Q1 FY 2021. While the company is expected to post its 12th consecutive loss per share, analysts estimate that it will be a significantly smaller loss compared to the year-ago quarter. Revenue is expected to start growing again, albeit at a meager pace of 0.6%. For full-year FY 2021, analysts are expecting Uber to report a loss per share of $1.57, which would be its smallest loss per share since posting positive earnings per share (EPS) in FY 2018. Annual revenue is forecast to rise 43.7%, which would be the fastest pace in at least four years.

Uber Key Stats
  Estimate for Q1 2021 (FY) Q1 2020 (FY) Q1 2019 (FY)
Earnings Per Share ($) -0.56 -1.71 -2.23
Revenue ($B)  3.3 3.2 2.8
Gross Bookings ($B) 18.1 15.8 14.6

Source: Visible Alpha

The Key Metric

As mentioned above, investors will also be focusing on Uber’s gross bookings. This key metric is defined as the total dollar value, including applicable taxes, tolls, and fees, generated by Uber’s ride-hailing, grocery and food delivery, and freight-shipping businesses. Gross bookings provides a snapshot of the scale of all of Uber’s services. Gross bookings are positively correlated with Uber’s revenue, the portion of gross bookings that the company claims as its own.

Growth in Uber’s gross bookings slowed sharply on an annual basis from 44.7% in FY 2018 to 30.5% in FY 2019. On a quarterly basis, gross bookings growth also decelerated markedly between Q4 FY 2018 and Q4 FY 2019, slowing by two or three percentage points sequentially. However, in Q1 FY 2021, the pace of growth slowed drastically, by as much as 20 percentage points to a YOY pace of 7.7%. That growth rate, however small, then turned into a decline. In each of the three subsequent quarters of FY 2021, gross bookings declined as lockdowns and people sheltering at home amid the pandemic significantly reduced demand for Uber’s ride-hailing services. This was partly offset by increased demand for Uber’s food delivery business. Analysts are forecasting a return to growth in Q1 FY 2021. They expect gross bookings to rise 14.5% compared to the year-ago quarter. For full-year FY 2021, analysts are expecting gross bookings to rise 45.1% to $84.0 billion.

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