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Should You Buy the Post-Earnings Dip in Uber With ETFs?
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The ride-hailing company Uber (UBER - Free Report) stock fell about 5.7% on May 8, 2024 following the release of first-quarter results. Revenue met estimates while gross bookings fell short. Uber’s net loss widened to $654 million from $157 million in the same quarter last year due to revaluations of Uber's investments.
Uber Technologies came up with a quarterly loss of $0.32 per share versus the Zacks Consensus Estimate of $0.21. This compares to loss of $0.08 per share a year ago. Total revenues of $10,131 million beat the Zacks Consensus Estimate of $10,076 million. The top line jumped 15% year over year.
The company reported $37.65 billion in gross bookings for the period, which is short of the $37.93 billion expected by analysts, according to StreetAccount, per CNBC. The company’s delivery segment reported $3.21 billion in revenue, up 4% from the year prior and 3% quarter over quarter. Analysts were expecting $3.28 billion, according to StreetAccount. Its delivery revenue margin was negatively impacted by 230 basis points due to “business model changes” in the first quarter.
Downbeat Guidance
For its second quarter, Uber expects to report gross bookings between $38.75 billion and $40.25 billion, compared with StreetAccount estimates of $40 billion, per CNBC. Uber anticipates adjusted EBITDA of $1.45 billion to $1.53 billion, compared with the $1.49 billion expected by analysts.
Should You Buy the Dip With Uber-Heavy ETFs?
Uber has a Zacks Rank #3 (Hold). It has an moderate VGM (Value-Growth-Momentum) score of “C”. The stock hails from Internet - Services industry which has an upbeat Zacks Rank (which places it in the top 22% of more than 251 Zacks industries).
If you are unnerved by Uber’s weak outlook but still want to play its industry exposure, you can play Uber-heavy ETFs. While investors will closely watch Uber in the ongoing quarter, ETFs that are heavy on Uber should also be watched. Uber-heavy ETFs will also be impacted with its earnings.
Investors should note that Uber’s peer company Lyft (LYFT - Free Report) jumped 7.1% on May 8. Lyft reported first-quarter 2024 earnings of 15 cents per share, which beat the Zacks Consensus Estimate of 9 cents and improved year over year. Revenues of $1,277.2 million also outpaced the Zacks Consensus Estimate of $1,170.1 million and improved year over year.
Several ETFs that have an exposure to Uber, have stakes in Zacks Rank #2 (Buy) Lyft too. Hence, those ETFs are likely to benefit from Lyft stock’s recent surge. It has an upbeat VGM score of “B”.
ETFs with Uber Technologies Exposure
iShares US Transportation ETF (IYT - Free Report) – Uber has 17.46% exposure; Lyft has 1.12% exposure
Franklin Disruptive Commerce ETF (BUYZ - Free Report) – Uber has 7.21% exposure
ProShares On-Demand ETF (OND - Free Report) – Uber has 4.75% exposure; Lyft has 4.65% exposure
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Should You Buy the Post-Earnings Dip in Uber With ETFs?
The ride-hailing company Uber (UBER - Free Report) stock fell about 5.7% on May 8, 2024 following the release of first-quarter results. Revenue met estimates while gross bookings fell short. Uber’s net loss widened to $654 million from $157 million in the same quarter last year due to revaluations of Uber's investments.
Uber Technologies came up with a quarterly loss of $0.32 per share versus the Zacks Consensus Estimate of $0.21. This compares to loss of $0.08 per share a year ago. Total revenues of $10,131 million beat the Zacks Consensus Estimate of $10,076 million. The top line jumped 15% year over year.
The company reported $37.65 billion in gross bookings for the period, which is short of the $37.93 billion expected by analysts, according to StreetAccount, per CNBC. The company’s delivery segment reported $3.21 billion in revenue, up 4% from the year prior and 3% quarter over quarter. Analysts were expecting $3.28 billion, according to StreetAccount. Its delivery revenue margin was negatively impacted by 230 basis points due to “business model changes” in the first quarter.
Downbeat Guidance
For its second quarter, Uber expects to report gross bookings between $38.75 billion and $40.25 billion, compared with StreetAccount estimates of $40 billion, per CNBC. Uber anticipates adjusted EBITDA of $1.45 billion to $1.53 billion, compared with the $1.49 billion expected by analysts.
Should You Buy the Dip With Uber-Heavy ETFs?
Uber has a Zacks Rank #3 (Hold). It has an moderate VGM (Value-Growth-Momentum) score of “C”. The stock hails from Internet - Services industry which has an upbeat Zacks Rank (which places it in the top 22% of more than 251 Zacks industries).
If you are unnerved by Uber’s weak outlook but still want to play its industry exposure, you can play Uber-heavy ETFs. While investors will closely watch Uber in the ongoing quarter, ETFs that are heavy on Uber should also be watched. Uber-heavy ETFs will also be impacted with its earnings.
Investors should note that Uber’s peer company Lyft (LYFT - Free Report) jumped 7.1% on May 8. Lyft reported first-quarter 2024 earnings of 15 cents per share, which beat the Zacks Consensus Estimate of 9 cents and improved year over year. Revenues of $1,277.2 million also outpaced the Zacks Consensus Estimate of $1,170.1 million and improved year over year.
Several ETFs that have an exposure to Uber, have stakes in Zacks Rank #2 (Buy) Lyft too. Hence, those ETFs are likely to benefit from Lyft stock’s recent surge. It has an upbeat VGM score of “B”.
ETFs with Uber Technologies Exposure
iShares US Transportation ETF (IYT - Free Report) – Uber has 17.46% exposure; Lyft has 1.12% exposure
Franklin Disruptive Commerce ETF (BUYZ - Free Report) – Uber has 7.21% exposure
ProShares On-Demand ETF (OND - Free Report) – Uber has 4.75% exposure; Lyft has 4.65% exposure