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UBER's Delivery Business Aids Growth Despite Expense Woes
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Uber Technologies, Inc. (UBER - Free Report) currently benefits from efforts to expand its Delivery operations. However, a rise in total costs and expenses poses a threat to Uber’s bottom line.
Uber incurred an adjusted loss of 18 cents per share in the first quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 27 cents. The bottom line improved year over year. Total revenues of $6,854 million also outperformed the Zacks Consensus Estimate of $6,202 million. The top line jumped more than 100% year over year.
How is Uber Faring?
Uber’s Delivery business is witnessing a boom with online order volumes surging amid the pandemic. Revenues from the segment increased 44% year over year in the first quarter of 2022, while gross bookings from the unit augmented 12%. Revenues and gross bookings from the Delivery segment increased significantly in 2021 as well. The segment reached adjusted EBITDA profitability in the fourth quarter of 2021. During first-quarter 2022, Delivery adjusted EBITDA was $30 million against an adjusted EBITDA loss of $200 million in the year-ago quarter. Uber’s efforts to expand its Delivery business are laudable.
Continued recovery in the Mobility business is encouraging. With increased vaccinations in the United States and some other key markets, Uber is seeing a constant improvement in demand for Mobility. In the fourth quarter of 2021, gross bookings from Mobility improved 67% year over year to $11,340 million, nearly reaching the pre-pandemic levels. Mobility revenues jumped more than 100% year over year in the first quarter, while gross bookings from the unit improved 58%. For the second quarter of 2022, Uber expects gross bookings of $28.5 billion-$29.5 billion.
Rise in total costs and expenses also poses a threat to Uber’s bottom line. Total costs and expenses surged 33% year over year in 2021 with sales and marketing expenses rising 33.7% and cost of revenues ascending 81.4%. The same surged 65.7% year over year in the first quarter of 2022 with sales and marketing expenses rising 14.5% and cost of revenues augmenting more than 100%.
Airbnb, Inc. (ABNB - Free Report) sports a Zacks Rank #1 at present. ABNB has a stellar surprise history, with its earnings having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 67.8%.
Airbnb is riding on an improvement in the travel industry.
Baidu (BIDU - Free Report) carries a Zacks Rank #2 (Buy), currently. BIDU has a stellar surprise history, with its bottom line having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 52.9%.
Shares of Baidu have gained 1.8% in the past month.
BlackLine, Inc. (BL - Free Report) carries a Zacks Rank of 2. Its long-term expected earnings growth rate is 14%.
BL has a stellar surprise history, with its earnings having outperformed the Zacks Consensus Estimate in three of the preceding four quarters (missing the mark in one), the average beat being 74.6%.
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UBER's Delivery Business Aids Growth Despite Expense Woes
Uber Technologies, Inc. (UBER - Free Report) currently benefits from efforts to expand its Delivery operations. However, a rise in total costs and expenses poses a threat to Uber’s bottom line.
Uber incurred an adjusted loss of 18 cents per share in the first quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 27 cents. The bottom line improved year over year. Total revenues of $6,854 million also outperformed the Zacks Consensus Estimate of $6,202 million. The top line jumped more than 100% year over year.
How is Uber Faring?
Uber’s Delivery business is witnessing a boom with online order volumes surging amid the pandemic. Revenues from the segment increased 44% year over year in the first quarter of 2022, while gross bookings from the unit augmented 12%. Revenues and gross bookings from the Delivery segment increased significantly in 2021 as well. The segment reached adjusted EBITDA profitability in the fourth quarter of 2021. During first-quarter 2022, Delivery adjusted EBITDA was $30 million against an adjusted EBITDA loss of $200 million in the year-ago quarter. Uber’s efforts to expand its Delivery business are laudable.
Continued recovery in the Mobility business is encouraging. With increased vaccinations in the United States and some other key markets, Uber is seeing a constant improvement in demand for Mobility. In the fourth quarter of 2021, gross bookings from Mobility improved 67% year over year to $11,340 million, nearly reaching the pre-pandemic levels. Mobility revenues jumped more than 100% year over year in the first quarter, while gross bookings from the unit improved 58%. For the second quarter of 2022, Uber expects gross bookings of $28.5 billion-$29.5 billion.
Rise in total costs and expenses also poses a threat to Uber’s bottom line. Total costs and expenses surged 33% year over year in 2021 with sales and marketing expenses rising 33.7% and cost of revenues ascending 81.4%. The same surged 65.7% year over year in the first quarter of 2022 with sales and marketing expenses rising 14.5% and cost of revenues augmenting more than 100%.
Zacks Rank & Key Picks
Uber currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks within the broader Computer and Technology industry are as follows:
Airbnb, Inc. (ABNB - Free Report) sports a Zacks Rank #1 at present. ABNB has a stellar surprise history, with its earnings having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 67.8%.
Airbnb is riding on an improvement in the travel industry.
Baidu (BIDU - Free Report) carries a Zacks Rank #2 (Buy), currently. BIDU has a stellar surprise history, with its bottom line having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 52.9%.
Shares of Baidu have gained 1.8% in the past month.
BlackLine, Inc. (BL - Free Report) carries a Zacks Rank of 2. Its long-term expected earnings growth rate is 14%.
BL has a stellar surprise history, with its earnings having outperformed the Zacks Consensus Estimate in three of the preceding four quarters (missing the mark in one), the average beat being 74.6%.