Uber Shares Fall After Earnings: What Investors Are Weighing

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Uber  (UBER) - Get Report beat on revenue and missed on earnings. The stock fell after hours. 

The company beat on revenue estimates on the strength of its explosively growing food delivery business, which is seeing a stay-at-home boon. Ride-sharing figures, challenged in the current environment, missed estimates slightly. 

Here were the results against Wall Street expectations: 

  • Revenue: $2.2B v. $2.08B (actual result year-over-year: -29%)
  • Gross Bookings: $10.2B v. $10.5B (-35%)
  • Rideshare Gross Bookings: $3.05B v. $3.5B (-75%)
  • Eats Gross Bookings: $6.96B v. $6.6B (+106%)
  • Rides Revenue: $790M v. $792M (-67%)
  • Eats Revenue: $1.21B v. $996M (+103%)
  • EBITDA: -$837M v. -$853M (Last year: -$656M) 
  • Loss Per Share: $1.02 v. 82 cents 

The operating profit widened even with revenue falling, suggesting operating leverage was poor in the quarter. The company did say that it turned a $50 million adjusted EBITDA profit for its rides business despite the poor topline result. That compares poorly to its $500 million profit for the segment last year. 

The company acknowledged it leaned on its Eats business for decent results compared to expectations for the quarter. "We are fortunate to have both a global footprint and such a natural hedge across our two core segments: as some people stay closer to home, more people are ordering from Uber Eats than ever before.” the company said. 

The stock fell 2.85% to $33.72 in after-hours trading. The stock entered earnings down 6.5% since June 8, when reopening stocks began to suffer. It traded at a multiple of revenue of just above 3 times 2021 earnings, a valuation that is fair to close to expensive given the stock’s history. 

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