Uber and Q4 earning review
Uber Technologies Inc. (UBER) will publish its Q4 2020 earnings on Wednesday February 10 after the closing bell on Wall Street. Uber was not that lucky after its shares went public, back in 2019. A few months later the COVID-19 pandemic hit the company, just as it did many other businesses in the transportation and service sectors, due to people staying at home and away from big cities, Uber’s biggest market.
Ahead of Wednesday’s report, the company’s share price is holding near an all-time high and 340% higher than the 2020 low ($13.85).
Estimates are widely pegged at a loss of 57 cents EPS (Yahoo Finance), wider than the Zacks Consensus Estimate of a loss of 53 cents. Analysts at Visible Alpha expect EPS of -$0.56 vs. -$0.64 in Q4 FY 2019 and Wall Street analysts are looking for a loss of $0.39 per share on $3.59 billion in revenue (FxEmpire).
What could affect the Report?
While the pandemic has meant fewer passenger rides in the past few months, new situations always create new opportunities as well – in Uber’s case, it responded by expanding its Uber Eats service into the alcohol delivery market, opening a new avenue into the very fast-growing delivery markets.
“The ride-share superstar has been busy as a bee in recent months, scooping up smaller operations to build new opportunities in the fast-growing delivery market. It just announced the purchase of alcohol delivery service Drizly for approximately $1.1 billion in cash and stock, opening a lucrative new venue. The service will be available in more than 1,400 cities across a majority of states and will be fully compliant with local jurisdictions.” (FxEmpire)
The importance of these two sectors was highlighted by CEO Dara Khosrowshahi last week, who noted that Uber Eats has been a very successful part of the platform during the pandemic. He discussed the acquisition of Drizly, stating the new service will extend its lead in the alcohol delivery industry.
For the current report, besides this information, we have to check Gross Bookings Rides as well.
Zacks Rank for Uber shares is #3 (Hold).
Technical overview:
The 2020 high at $56 (September) and the open level of the gap, which was seen on February 2, is the first support, while the 50 DMA at $52.54 is the main support. If the report is not satisfactory, these levels will be more important, while a better than expected report could help the current uptrend which has been strong since November 2020, as is clear in the daily chart
Ahura Chalki
Foreign Market Analyst
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