Uber (Nasdaq: UBER) shares were down nearly 10% despite the company exceeding analysts' estimates. This follows a trend seen in many tech and travel stocks which delivered better than expected results but were still met with selling pressure. The company's loss was worse due to write downs of its stake in companies like Grab, Aurora, and Didi.
Overall, Uber shares are down 58% from their all-time high in February 2021. It's also now down 37% from its IPO price of $42 and 32% lower YTD. Interestingly, Uber chose to move up its earnings release data a day sooner, following Lyft's (Nasdaq: LYFT) disastrous results. The companies seem to be diverging as Uber is focusing on profitability and maximizing cash flow, while Lyft continues to invest in growth.
Inside the Numbers
This might explain why Lyft's stock was down nearly 30% following earnings, while Uber's was down significantly less due to a stronger earnings report.
In Q1, the company reported a loss of $0.18 vs estimates of a loss of $0.24. Revenue topped expectations at $6.9 billion vs $6.1 billion, a 136% increase compared to last year.
In Q2, the company expects gross bookings of around $29 billion and EBITDA between $240 million and $270 million. This is certainly one reason that investors are feeling more positive towards the company as it's a meaningful inflection point.
Another one is that mobility gross bookings exceeded 2019 levels across all regions. In total, this segment generated $10.7 billion, a 58% increase. Delivery had gross bookings of $13.9 billion, a 12% increase. Overall, mobility revenues are now larger than delivery revenue.
Monthly active users increased by 17% to 115 million, and trips on the platform increased by 18% to 1.71 billion. Drivers also increased along with trips, although this remains a major focus for the company. Part of this involves incentives to recruit and keep drivers on the platform, especially after the pandemic. This has impacted margins and earnings, but the company believes it's an essential investment.
Uber shares continue to be intriguing as the stock is a beneficiary of organic growth and the recovery in travel following the pandemic. It's more popular among younger people, so user growth and rides per user should continue to increase. However, the stock remains quite expensive with a $56 billion market cap and $17 billion in revenue, and it's facing the same headwind as other high-multiple, unprofitable tech stocks.