Uber Soars on Stellar Q4 Results, Outpaces Expectations

Ride-hailing giant Uber Technologies, Inc. (NYSE: UBER) delivered stellar fourth-quarter and full-year results on the heels of a recovering economy and strong demand for its services. Uber’s Monthly Active Platform Consumers (MAPCs) reached 118 million.

Following the news, shares gained 5.8% during the extended trading session, after gaining 4.8% during the regular trading to close at $40.19 on February 9. Uber stock has lost 26.4% over the past year.

Uber’s gross bookings rose 51% year-over-year to $25.9 billion, including Mobility gross bookings of $11.3 billion and Delivery gross bookings of $13.4 billion. Notably, Uber recorded 1.77 billion trips in Q4, translating to roughly 19 million trips per day on average.

Stellar Results

Uber reported diluted earnings of $0.44 per share in Q4, significantly higher than the analysts’ estimated loss of $0.35 per share, and better than the prior-year diluted loss of $0.54 per share.

The quarterly net income received a boost from a one-time gain from equity investments of $1.4 billion, mainly related to unrealized gains on the revaluation of Uber’s Grab and Aurora equity investments, which was partially offset by an unrealized loss on Uber’s Didi equity investment.

Moreover, quarterly revenue jumped 83% year-over-year to $5.78 billion and also surpassed Street estimates of $5.34 billion. Mobility contributed $2.28 billion and Delivery generated $2.42 billion in total revenue during the quarter.

Similarly, for the full year fiscal 2021, Uber’s revenue advanced 57% to $17.45 billion, and diluted loss stood at $0.29 per share, better than the FY20 loss of $3.86 per share.

CEO Comments

Delighted with the results, Dara Khosrowshahi, CEO of Uber, said, “In Q4, more consumers were active on our platform than ever before, Delivery reached Adjusted EBITDA profitability, and Mobility Gross Bookings approached pre-pandemic levels. While the Omicron variant began to impact our business in late December, Mobility is already starting to bounce back, with Gross Bookings up 25% month-on-month in the most recent week.”

Q1FY22 Outlook

Based on the continued business momentum, Uber expects Q1 gross bookings to fall in the range of $25 billion to $26 billion. Meanwhile, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are projected to be between $100 million to $130 million.

Wall Streets’ View

Ahead of Uber’s quarterly results, Mizuho Securities analyst James Lee reiterated a Buy rating on the stock with a price target of $72, which implies 79.2% upside potential.

Lee expects Omicron’s headwinds to impact the Q1 guidance for travel companies. He expects the European markets to still show an upward swing with rising cases, while U.S. cases have already plateaued in key markets.

About his optimistic view on Uber, Lee stated, “As we look beyond COVID and into normalized travel patterns, we expect the mix shift to urban and international destinations to be favorable to UBER.”

“On the upcoming Analyst Day, we believe that management would highlight long-term profitability given its strong position in Mobility and disciplined investments in Delivery. We expect the company could exit markets where it does not have category-leading positions for Grocery delivery, and invest back in core markets to optimize its path to positive margins,” Lee added.

With 13 unanimous Buys, the Uber stock commands a Strong Buy consensus rating. At the time of writing, the average Uber price target was $65.23, which implies 62.3% upside potential to current levels.

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