Uber's Q3 Results Expected to Outperform Expectations on Strong Mobility Trends

Strategic Insights -

Uber Technologies Inc's (NYSE:UBER, ETR:UT8) third-quarter results are poised to modestly outperform Wall Street expectations, driven by robust mobility trends and continued progress in autonomous vehicle (AV) development. Bank of America analysts have maintained their "Buy" rating on the ride-hailing and delivery app with a $115 price objective. The analysts expect strong Q3 mobility trends to point to a small upside relative to both their own forecasts and Wall Street's expectations. Uber's bookings estimate of $49 billion and revenue estimate of $13.3 billion are expected to outperform expectations, with a 19% year-over-year growth excluding foreign exchange.

Key Takeaways:

  • Bank of America analysts expect Uber's Q3 bookings to be $49 billion, outperforming their own forecasts and Wall Street's expectations of $48.9 billion.
  • The analysts' bookings estimate represents 19% year-over-year growth excluding foreign exchange, accelerating from the prior quarter.
  • Uber's EBITDA estimate of $2.25 billion is slightly below the Street's estimate of $2.27 billion, but a modest beat is possible.
  • Industry data points to healthy mobility growth, with BAC card data indicating a 3-point acceleration in US Online Transit spend growth in Q3.
  • The analysts expect delivery growth to be supported by the Trendyol Go acquisition and robust US eCommerce trends.
  • Bank of America forecasts fourth-quarter bookings between $51.75 billion and $53.25 billion and EBITDA between $2.40 billion and $2.50 billion.
  • The midpoints of these forecasts would imply 19% year-over-year bookings growth and a 7.3% incremental margin.

Statistics:

  • 19% year-over-year growth in bookings excluding foreign exchange in Q3.
  • 23% acceleration in US Online Transit spend growth in Q3 compared to 20% in the prior quarter.
  • $49 billion in bookings forecasted for Q3 by Bank of America analysts.
  • $2.25 billion in EBITDA forecasted for Q3 by Bank of America analysts.
  • 7.3% incremental margin implied by the midpoints of Bank of America's fourth-quarter bookings and EBITDA forecasts.

Sources:

  • Bank of America analysts' report cited in the article.
  • California's new SB 371 and AB 1340 laws.
  • Uber's website for Q3 earnings release on November 4.
  • BAC card data provided by Bank of America.