Uber
Over the past few weeks, strength has returned to travel stocks due to the steep falling in coronavirus cases and strong bookings in Q2 and Q3. In essence, the pent-up demand and recovery for travel which kept getting delayed due finally seem like it's going to begin. This should provide a nice earnings tailwind to travel stocks over the next couple of years and give a cyclical boost to Uber in addition to its secular growth.
Inside the Numbers
In Q4, Uber reported earnings per share of $0.44. This includes a large investment gain. Without this, the company would have reported a loss of $0.26 per share which topped expectations of a loss of $0.35 per share. It also reported $5.78 billion in revenue which beat estimates of $5.34 billion.
In terms of its outlook, the company issued a 2024 target of $5 billion in operating profits which was below analysts' expectations of $5.7 billion in operating profit. It also sees gross bookings between $165 billion and $175 billion which were in line with expectations.
Uber's mobility segment reported $11.3 billion in gross bookings, a 67% increase from last year. Its delivery segment reported $13.4 billion in gross bookings, a 34% increase. This also tracks with the economy gradually returning to normal as travel volumes should exceed pre-pandemic levels in the coming months.
Its delivery segment saw a huge surge in growth during the pandemic which is now moderating. It currently has 825,000 merchants on its platform. The company also noted that bookings have continued to rise in recent weeks which bodes well for the upcoming quarter.
It reported 1.77 billion trips, an 8% increase from last quarter and 23% from last year. Users reached 118 million, an 8% increase. The company was also able to add more drivers, leading to fewer wait times and surge pricing.
Uber's shares are down about 40% from their high in February and are up about 15% from their January lows. It does seem like a good way for investors to get exposure to the rebound in travel. It's $5 billion in operating profit in 2024 is not too exciting, but it still has an attractive business model that should have no trouble scaling higher with continued margin growth.
At one point, Uber had ambitions to be another Apple