Services

Can Uber Keep Pace With Lyft When It Reports?

Uber Technologies Inc. (NYSE: UBER) is set to report its most recent quarterly results after the markets close on Thursday. The consensus estimates call for a net loss of $0.83 per share and $3.51 billion in revenue for the first quarter. The same period of last year reportedly had a net loss of $2.23 per share and $3.04 billion in revenue.

Ride-hailing rival Lyft (NASDAQ: LYFT) already announced its first-quarter results and the reaction was explosive. Will Uber be able to keep up?

Uber recently said that it is leading an investment round of $170 million in the scooter-rental company Lime. Alphabet, GV and Bain Capital are a few of the big-name stakeholders in Lime. Ultimately, this investment round valued Lime at roughly $400 million, according to Bloomberg.

On Wednesday, Uber shared that it plans to take more action to cut costs due to the COVID-19 pandemic. This includes layoffs and executive pay cuts.

In a filing with the U.S. Securities and Exchange Commission, the company noted that it plans to reduce its operating expenses in response to the economic challenges and uncertainty resulting from the ongoing pandemic and its impact on the business.

The company detailed:

Due to lower trip volumes in its Rides segment and the Company’s current hiring freeze, the Company is reducing its customer support and recruiting teams by approximately 3,700 full-time employee roles. In connection with these actions, the Company estimates that it will incur approximately $20 million related to severance and other termination benefits. The Company is evaluating other cost and will provide an update in subsequent SEC disclosures regarding such amounts, if material.

Excluding Thursday’s move, Uber stock had outperformed the S&P 500 and Dow Jones industrial average with a decline of about 6.5% year to date.

Here’s what a few analysts are saying about Uber ahead of the report:

  • RBC has a Buy rating with a $44 price target.
  • Raymond James rates it as Outperform with a $36 target.
  • UBS has a Buy rating with a $38 target price.
  • SunTrust’s Buy rating comes with a $42 price target.
  • BofA Securities has a Buy rating and a $40 price target.
  • Goldman Sachs has a Buy rating with a $41 price target.

Uber stock traded up about 8% at $30.05 on Thursday, in a 52-week range of $13.71 to $47.08. The consensus price target is $38.02.