Here comes Uber …

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Here comes Uber …

uber ceo Dara Khosrowshahi

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  • Uber will report its third-quarter earnings shortly after 4 p.m. ET on Monday.
  • The ride-hailing giant is expected to slow its losses on its race to turn a profit.
  • Shares of the company are down more than 25% since it went public in May.
  • Investors will be looking for detail into how quickly Uber Eats and other areas can grow to help support the overall business.
  • Last week, Lyft topped Wall Street expectations with its earnings report.
  • Visit Business Insider's homepage for more stories.

Uber is set to report its third-quarter financial performance after the close of markets on Monday.

Here's what Wall Street analysts are expecting from the ride-hailing giant, as it attempts to curb its losses and turn a profit for the first time:

  • Earnings: $-0.63 per share
  • Revenue: $3.4 billion

Anxious investors have watched the company's stock price sink more than 25% since it went public in May. Despite the slump, analysts remain overwhelmingly positive on the name, setting an average price target of $48 - 60% above Monday's prices - for shares over the next 12 months.

"We expect a mixed set of results from Uber," Masha Kahn, an analyst at HSBC said in a note to clients. "We think growth in bookings could disappoint while loss reduction could be a positive surprise. We also think improved disclosure around Rides and Eats contribution margin should help support SOTP-based valuation."

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Last week, Uber's closest competitor, Lyft, reported quarterly results that were better than what analysts' had expected for revenue and total losses, while continuing to grow its ridership. That's putting added pressure on Uber, which is continuing to invest in expensive areas like self-driving cars and flying taxis.

When it comes to the more mature of Uber's expansion areas beyond taxi rides, especially Eats, analysts will be looking for how quickly those areas can bolster the company's bottom line.

"A core tenet of our longer term positive thesis on the name is around Uber's ability to morph its unrivaled ridesharing platform into a broader consumer engine with Uber Eats, Uber Freight, and autonomous initiatives to hit its full monetization potential at scale," Daniel Ives, an analyst at Wedbush, said last week.

Going into the earnings report, trading options contracts are heavily skewed toward puts instead of calls by more than 2-to-1, according to Bloomberg data. That's a bearish sign for Uber, especially given Lyft's lukewarm reception last week. Historically, the stock has moved 6.5% in either direction after earnings reports but options contracts imply a move of up to 14% on Monday.

"Since going public, Uber has been a horror show as the stock is down 30% (vs. Nasdaq +6%) and Dara & Co. have not done the hand holding needed with investors to gain more comfort in the Uber story," Ives said.

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"While Lyft has now given targets on profitability, Uber remains mum with hopes the company will give some more color around its bottom line strategy on its conference call Monday night."

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