* Reports Q3 2019 results on Monday, November 4, after the close
* Revenue expectation: $ 3.63 billion
* EPS expectation: – $ 0.7
Investors have not shown much confidence in the future of & # 39; the world's largest ride-hailing company, Uber Technologies Inc (NYSE :). The shares have been in a downward spiral since the IPO because the company is struggling to show a path to profitability.
And any news about a quick turnaround is unlikely in our opinion when the company reports its third quarter on Monday after the market closes. According to analysts' consensus expectations, Uber will produce a loss of $ 0.7 per share on sales of $ 3.63 billion.
Losses from technology companies that are in a growth phase are not surprising. But what casts doubt on the San Francisco-based company is the absence of a clearly formulated strategy that could turn this unicorn into a profitable venture.
This uncertainty has seriously damaged Uber's shares. Since his debut on May 10, his shares have fallen by 30%. They fell more than 6% in New York yesterday, ending the session at $ 31.50.
With its profit report, the company must give the impression that its core activities are slowing down. Investors did not see this confirmation when Uber reported its second quarter earnings in August. Adjusted sales in that period increased by 12% compared to a year earlier, the lowest percentage in the company's history, while total losses amounted to more than $ 5 billion.
Uber's growth platform
Despite these setbacks, Uber & # 39; s Chief Executive Officer Dara Khosrowshahi wants investors to focus on the power of the evolving & # 39; platform & # 39; of the company, which he says will one day create the largest modern transport ecosystem, including fast, fast service growing food delivery companies – Uber Eats – electric scooters, freight delivery, driverless vehicles and even flying cars.
A final addition to its growing service portfolio is Cornershop, which helps supermarkets, pharmacies and food retailers deliver their goods. That all looks great and perhaps achievable for a technology-driven company that has changed the way people move from one place to another.
The 10-year-old company controls more than 65% of the market for journeys in the US, Canada, Latin America, Europe, Australia and New Zealand. But that share is becoming increasingly difficult to defend when many smaller companies that drive, bring new challenges and increase competition globally.
For those investors who want some exposure in the ride industry, we find Uber's biggest rival, Lyft Inc (NASDAQ :), a much better bet. In contrast to Uber, Lyft is exclusively focused on transport and comes closer to achieving profitability.
The company beat analysts' sales estimates for Wednesday and increased its forecast for 2019 and reiterated that it will make a profit by the end of 2021.
Bottom Line
Uber must quickly find a way to improve its core business and show investors that they are on the right track to eliminate losses and grow revenue. But so far that seems far away.
