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Uber Q1 earnings summary and technical analysis

We examine the highlights from Uber’s first quarter FY20 results.

Uber share price Source: Bloomberg

Uber’s key Q1 figures at a glance

It seems even a global pandemic can’t slow down Uber Technologies.

After the market close on 7 May, the ride sharing juggernaut delivered an impressive set of Q1 results – highlighting growth across all of the company’s key business segments.

Taking a glance at these results, on a constant currency basis, for the quarter ending 31 March, Uber recorded:

  • Gross bookings of $15,776 million, up 10%
  • GAAP revenues of $3,543 million, up 16%
  • Rides GAAP revenue of $2,470 million, up 4%
  • Eats GAAP revenue of $819 million, up 56%
  • GAAP net losses of $2,936 million
  • Cash and cash equivalents of $8,165 million

Though Uber continues to be loss-making, investors seemed to pay little attention to such concerns; both before and after the company’s latest earnings release.

Indeed, in the lead up to the Q1, investors bid Uber 11.06%, or $3.08 higher during Thursday’s session, to $30.93 per share; a far cry from the company’s 52-week low of $13.71 per share.

Bullish sentiment continued after the Q1 release, with the stock climbing a further 6.11% in after-hours trade. At the time of publishing, Uber traded around the $32.82 mark.

Uber technical analysis

In response to Uber's Q1 and from a technical perspective, IG Market Analyst Kyle Rodda said:

'After this morning’s better than expected results, Uber’s share price confronts a confluence of key levels of resistance now at approximately $US32.00 – which it did challenge, but failed to break-through, in post-market following the company’s earnings announcement.'

Mr Rodda went on to say:

‘From a technical standpoint, if it manages to break-through this significant price point, room opens-up for the share price to rally towards the next key resistance level just above $US35.00 per share. Alternatively, if it doesn’t, and the latest rally in Uber shares is faded by the market, then the focus will turn to whether prior resistance, now support, at $US29.30 will hold.’

Uber TA Source: IG

Uber share price: the Cornavirus impact examined

Unsurprisingly, Uber saw the growth of its Rides segment taper off in the first quarter, as travel restrictions impacted many of the ride-sharing giant’s key markets.

Mind you, growth wasn’t wiped out completely, with the company recording Q1 gross bookings of $10,874 million (-3%), against Rides GAAP revenue of $2,470 million (+4%) – on a constant currency basis.

The company was also keen to highlight that for the quarter:

‘Rides Adjusted EBITDA delivered $581 million in profit, up $389 million year-over-year.’

Moreover, while Uber’s Rides revenue stalled in the quarter – its Eats segments, which has benefitted from many countries stay-at-home policies – saw its revenue surge in Q1.

Here, Uber recorded Q1 Eats gross bookings of $4,683 million (+54%), against Eats GAAP revenue of $819 million (+56%) – on a constant currency basis.

In saying that, the Eats segment remains significantly loss making, recording a Q1 Adjusted EBITDA loss of $313 million.

Speaking of the outlook, Uber’s CEO, Dara Khosrowshahi said:

‘Along with the surge in food delivery, we are encouraged by the early signs we are seeing in markets that are beginning to open back up. Our global footprint and highly variable cost structure remain an important advantage, as our expectation is that the Rides recovery will vary by city and country.’

Elsewhere, the company exited eight unprofitable Eats markets during the quarter and also booked $2.1 billion worth of pre-tax impairment write-downs. A significant portion of these write-downs were related to Uber's investment in Chinese ride-sharing company Didi as well as credit loss allowances related to the company's Grab investment.

These moves, said Uber’s CFO Nelson Chai, will help the company ‘emerge stronger and more focused’ in a post-Covid world.

Uber currently has an implied market capitalisation of $53.43 billion.

How to trade Uber Technologies – long or short

What do you make of this market announcement: do you see a bullish or bearish opportunity? Trade accordingly. You can use CFDs to trade Uber and other ride-sharing companies such as Lyft – LONG or SHORT through IG’s world-class trading platform now.

For example, to buy (long) or sell (short) Uber using CFDs, follow these easy steps:

  • Create an IG Trading Account or log in to your existing account
  • Enter ‘UBER’ in the search bar and select it
  • Choose your position size
  • Click on ‘buy’ or ‘sell’ in the deal ticket
  • Confirm the trade

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

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