Uber Technologies, Inc. (OVER) traded nearly 4% lower in Thursday’s pre-market session after meeting fourth quarter 2020 earnings estimates with a loss of $ 0.54 per share, while sales fell short of expectations and were up year-on-year Fell 15.5% to $ 3.17 billion. Gross bookings increased 16% year over year to $ 17.2 billion, 5% less than the year-ago quarter, while gross bookings for shipments declined 128%.
The central theses
- Uber was expected to lose money in the fourth quarter while revenues shrank below consensus.
- The company expects to be profitable by the end of 2021.
- Delivery services have made up a significant portion of the lost driver income.
Monthly Average Platform Consumers (MAPC) declined 16% year over year to 93 million, driven by ongoing pandemic pressures. However, Uber said the turnaround was still on the right track EBITDA positive by the end of 2021. However, it said the same in 2020, but had to withdraw Guidance when the pandemic sparked a collapse in the driving force. The company now believes its hugely successful delivery service combined with cost controls will be enough to overcome lost booking revenue.
On the way to the report, it seemed like Uber was expecting sentiment improving after rival Lyft, Inc. (LYFT) posted a less-than-expected fourth quarter loss on Tuesday and was optimistic about a rebound in the second half. The mantra of recovery makes more sense today than it will in 2020, as vaccines are having an impact on infection rates around the world after this winter’s huge outbreak.
Wall Street’s consensus on Uber is slightly bullish, with an “Overweight” rating based on 31 “Buy”, 3 “Overweight” and 5 “Hold” recommendations. Three analysts are now recommending that shareholders close positions and step on the sidelines. Price targets Currently, they range from a low of $ 50 to a street high of $ 80, while the stock is set to open Thursday’s session about $ 7 below the median of $ 68. This modest placement could limit the disadvantage in the upcoming meetings.
EBITDAEarnings before interest, taxes, depreciation and amortization are a measure of a company’s overall performance Financial performance and is used as an alternative to Net income under certain circumstances. However, EBITDA can be misleading as it eliminates the cost of capital investments such as property, plant and equipment.