Uber Technologies (UBER) is expected to report a “confident and relatively bullish” fourth-quarter earnings report and 2023 outlook on Wednesday, analysts at Wedbush Securities said Monday.
Rideshare activity likely accelerated in December, with momentum continuing into the current quarter, analysts Daniel Ives and John Katsingris said in a note. The company is on track to report “slight upside” to consensus bookings and earnings before interest taxes, depreciation and amortization estimates for the quarter, they wrote.
The brokerage expects Uber to exceed Wall Street’s expectation of $30.6 billion for gross bookings due to mobility strength, though “delivery activity could be a bit light,” according to the report. Take rates, or the amount Uber gets in fees per ride, also likely improved year over year, the analysts said.
Wedbush is forecasting a fourth-quarter loss per share of $0.12 on revenue of $8.60 billion and a 2023 adjusted loss per share of $0.10 on revenue of $37.19 billion.
“Adjusted EBITDA of $619 million is front and center for the Street as Uber now balances improved growth and profitability into 2023,” Ives and Katsingris said. “After a transitional year of growth and cost cutting, we are seeing a leaner Uber finally hitting the inflection of growth and EBITDA levels the Street had only dreamed of a few years ago.”
The analysts reiterated an outperform rating and a $38 price target. While the stock has “seen ebbs and flows over the past few years,” it is starting to see an inflection point, with Uber expected to hit “its next gear of growth into 2023,” according to the report. Shares of Uber rose 2.5% in afternoon trade Monday, and are up nearly 37% since the start of the year.
Wedbush said it doesn’t expect mass layoffs at Uber because the company has “managed expenses and driver supply well in this very tricky macro backdrop.” Several tech companies, including Microsoft (MSFT), Amazon (AMZN), Google parent Alphabet (GOOG, GOOGL) and HP (HPQ), have announced layoffs in recent months.