Uber Earnings Imminent: Analysts Revise Forecasts Ahead of Earnings Call

Uber Technologies, Inc. (UBER) is set to report its fourth-quarter earnings before the bell on Wednesday, with analysts projecting a mixed bag of results. Revenue is expected to have grown year-over-year, but profit is projected to have declined due to a one-time net benefit from the revaluation of equity investments in the previous quarter. Despite the expected decline in profit, analysts remain overwhelmingly bullish on Uber's stock, with all 25 analysts tracked by Visible Alpha rating it a "buy." Their consensus price target at $90 would imply 29% upside from Tuesday's close at $69.75.

Analysts have been revising their earnings estimates for Uber in recent weeks, with the Zacks Consensus Estimate for fourth-quarter earnings per share (EPS) revised 8% downward in the past 60 days. The consensus mark still implies a 21% uptick from the year-ago actual, suggesting that analysts still have a positive outlook on Uber's long-term earnings growth. However, the downward revision reflects a decrease in analysts' confidence in the company's near-term earnings prospects.

Several factors have influenced analysts' revisions in their earnings estimates for Uber, including revenue growth, operating expenses, gross bookings, advertising revenue, and autonomous vehicle (AV) partnerships. Uber's revenue growth has been a significant factor, with the company's revenue growing by 18% year-over-year in the past year. This growth has led analysts to revise their earnings estimates upward, as higher revenue typically translates to higher profits. However, analysts have also been concerned about Uber's ability to control its operating expenses, with the company's operating expenses as a percentage of revenue increasing in recent quarters. This trend has led analysts to revise their earnings estimates downward, as higher expenses result in lower profit margins.

Gross bookings, which represent the total value of all rides and deliveries facilitated through Uber's platform, have also been a key factor in analysts' revisions. Uber's gross bookings have grown consistently, driven by increases in both the number of active users and the frequency of use. This growth has led analysts to revise their earnings estimates upward, as higher gross bookings typically translate to higher revenue. However, analysts have also been concerned about the impact of competition on Uber's gross bookings growth, with rivals such as Lyft and DoorDash also reporting strong growth in their gross bookings.

Advertising revenue has been another focus for analysts, with Uber's advertising business growing significantly in recent quarters. This growth has led analysts to revise their earnings estimates upward, as higher advertising revenue contributes to Uber's overall revenue and profits. However, analysts have also been concerned about the impact of a potential economic downturn on advertising spending, which could negatively impact Uber's advertising revenue.

Autonomous vehicle (AV) partnerships have also influenced analysts' revisions, with Uber's partnerships with AV companies such as Waymo and Nvidia positioning the company to be a key player in the AV market. This potential growth has led analysts to revise their earnings estimates upward, as Uber's AV initiatives could drive significant revenue growth in the future. However, analysts have also been concerned about the regulatory and technological challenges associated with AV deployment, which could impact Uber's ability to capitalize on this growth opportunity.

In comparison to its competitors in the ride-sharing and delivery sectors, such as Lyft and DoorDash, Uber's earnings revisions have been similar to those of Lyft, with both companies experiencing an 8% downward revision in their earnings estimates in the past 60 days. DoorDash, on the other hand, has experienced a slightly larger downward revision, with a 10% downward revision in the past 60 days. However, all three companies have positive earnings growth expectations, with Uber and Lyft expected to grow by 21% and DoorDash expected to grow by 15%.

In conclusion, analysts' revisions in their earnings forecasts for Uber reflect a mix of optimism and caution, with the company's revenue growth and AV partnerships driving upward revisions, while concerns about operating expenses and competition driving downward revisions. Despite the expected decline in profit, analysts remain overwhelmingly bullish on Uber's stock, with their consensus price target at $90 implying 29% upside from Tuesday's close. As Uber reports its fourth-quarter earnings, investors will be watching closely to see if the company's results align with analysts' expectations and whether the stock price reflects this optimism or caution.