On Feb 10, after market closed, Uber Technologies (NYSE:UBER) UBER – mainly known for its ride-sharing business – came out with a quarterly adjusted loss of $0.54 per share versus the Zacks Consensus Estimate of a loss of $0.53. This compares to loss of $0.64 per share a year ago. Over the last four quarters, the company has surpassed consensus EPS estimates just once.
Uber, which belongs to the Zacks Internet - Services industry, posted revenues of $3.17 billion for the quarter in the fourth quarter of 2020, missing the Zacks Consensus Estimate by 11.50%. This came against year-ago revenues of $4.07 billion. The company has topped consensus revenue estimates two times over the last four quarters.
Shares slumped about 4.9% after hours on Feb 10 on mixed results. Since Uber gained as much as 5% in the key trading session on the day before the release of earnings (as its peer Lyft (NASDAQ:LYFT) offered an optimistic outlook a day before), shares of Uber probably received more punishment after hours (read: ETFs to Play as Lyft Rides Past Estimates in Q4 Earnings).
Uber’s Q4 Earnings: Delivery Versus Rideshare
Uber managed to beat on the bottom line thanks to its Delivery Business. Gross bookings in Delivery Business went up 130% year over year to $10.05 billion while bookings in the Mobility segment fell 50% to $6.79 billion. However, in terms of revenues, Uber’s core ride-sharing business has beaten the delivery one negligibly, for the first time since the start of the Covid-19 pandemic as reopening of economies gaining steam.
The company indicated that restaurants on Uber Eats topped 600,000 in the fourth quarter, with the addition of the likes of Union Square Hospitality Group establishments, Chipotle (NYSE:CMG) locations in the United Kingdom, Wings Etc, per a CNBC article.
Not only restaurants’ food delivery, the company has forayed into non-food deliveries after “acquiring Cornershop in Mexico for groceries, and Postmates’ courier service which offers deliveries from Apple (NASDAQ:AAPL), among others” per a CNBC article. In Q4, Uber joined hands with retailers like H&M in Canada and Seiyu grocery and department stores in Japan, the CNBC article noted.
Should You Bet On Stock or Uber-Heavy ETFs?
In 2020, Uber’s net losses stood at $6.77 billion, marking about a 20% improvement from a massive $8.51 billion loss in 2019. This is an encouraging fact about the stock. A Pickup in the delivery business (including food and non-food) marks Uber’s efforts for diversification.
But new variant of coronavirus spread is a concern and may slow the global economic recovery. Notably, Germany plans to prolong lockdown on concerns over new coronavirus variants. Hence, ETF is a better approach to play Uber’s delivery business growth than the stock itself, as the ETF route minimizes company-specific risks.
Uber has exposure to funds like Renaissance IPO ETF IPO and First Trust US Equity Opportunities ETF FPX with about 9.78% to 6.08% weight. Apart from this, the stock has exposure to Invesco NASDAQ Internet ETF PNQI and Global X Millennials Thematic ETF MILN. All these ETFs can offer you less risky approach to play Uber earnings.
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Uber Technologies, Inc. (UBER): Free Stock Analysis Report
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