Keep an Eye On Uber Earnings

Uber is set to report earnings on Wednesday, May 8 before the market opens

• Last quarter, Uber more than doubled the EPS estimate of $0.41 after reporting a staggering $0.86 EPS.
• This time around, analysts expect Uber to report an EPS of $0.39 on $10.09 billion in revenue.
• Uber exceeded EPS estimates three quarters in a row but fell short of revenue estimates twice.
• Investors and traders will have their eye on ride demand figures and a forecast for the year to come.

Just a few months ago, Uber Technologies (UBER) was trading around $40 per share. Since then, the stock has skyrocketed to an all-time high of $82.14 after opening the 2024 trading year at $60.73. The stock currently sits at $71.50.

During the last earnings call, reported on Feb. 7, the iconic ride-share company blew the doors off earnings estimates when they more than doubled the EPS figure. This week, Uber is expected to report an EPS of $0.39 on $10.09 billion in revenue.

This EPS figure is lower than what analysts expected last quarter prior to the over 100% EPS beat, which is a curious point to note.

In the last earnings call, Uber CEO Dara Khosrowshahi offered some key points for 2023:

“2023 was an inflection point for Uber, proving that we can continue to generate strong, profitable growth at scale ... Our audiences are larger and more engaged than ever, with our platform powering an average of nearly 26 million daily trips last year.”

• Fourth-quarter trips and monthly active platform consumers grew 24% and 15% year-over-year, respectively

• Fourth quarter gross bookings grew 22% year-over-year and 21% year-over-year on a constant currency basis

• Fourth quarter net income was $1.4 billion; Income from operations of $652 million.

• Fourth-quarter operating cash flow was $823 million; Free cash flow of $768 million

After such a strong year and quarter, it's no surprise to see immense strength in the UBER stock price.

The UBER options chain can help us put context around the implied volatility for this earnings announcement relative to further-dated cycles.

Looking at the expected move for UBER this week, we can see the market is pricing in a +-$5.37 stock-price move for the week, which is about a 7.5% stock-price move. This is relatively high compared to other earnings calls, which typically land between 5% to 10% of the stock price.

Looking further to June and December, we can see a +-$8.03 and +-$18.34 expected moves, respectively. This tells us that the market is placing a relatively heavy weight on this week's earnings announcement, since this week makes up for a large chunk of the expected move through June.

Remember, the last day to place an earnings options trade in UBER is Tues. May 7, as they report before the market opens on May 8.

Lyft Inc (LYFT) reports earnings on Tues. May 7 after the market closes, so we may get an early glimpse into sector information at the very least ahead of Uber's call the following morning.

Bullish on Uber for earnings

If you're bullish on Uber, you may believe that ride-share demand remains strong, and the company will have positive things to say for the 2024 summer outlook. With companies going back to hybrid work weeks and customers itching to get out after winter, it makes sense that they may paint a pretty picture for the next few months in terms of demand.

Bearish on Uber for earnings

If you're bearish on Uber, you may think that the reduced EPS estimate after such a large beat is a neutral to bearish sign. Generally, when a company smashes an earnings figure, the next quarter tends to be a higher estimate, but this is not the case for Uber. If Uber misses EPS or revenue estimates, we could see the stock take a dive considering the strong rally we've seen so far this year.

Tune in to Options Trading Concepts Live on Tuesday, May 7 at 11 a.m. CDT for some options strategy ideas ahead of the Uber earnings call on Wednesday morning.

Mike Butler, tastylive director of market intelligence, has been in the markets and trading for a decade. He appears on Options Trading Concepts Live, airing Monday-Friday. @tradermikeyb

For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro. 

Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.