Up 50% in 2023 and Still a Screaming Buy

Since we first expressed our love for Uber (UBER) stock, it’s up roughly 35%. YTD it has soared approximately 50%. And Uber tacked on around another 16% since reporting earnings this week. 

No shock, given that Uber once again beat earnings estimates: 

• Revenue of $8.82 billion, up 29% year over year, beat the consensus of $8.72 billion. 
• EPS came in at a loss of $0.08 versus estimates of $0.09. 
• Gross bookings in Uber’s mobility segment (rideshare) are up 40% year over year. Delivery gross bookings are up 8%. 

Uber’s net loss for the quarter was $157 million, compared to a $5.9 billion net loss in the same quarter of last year. 

The Juice likes to listen to earnings conference calls so we can take you beyond the headline numbers. This is one way to set yourself apart from a majority of retail investors. Get deeper in the weeds on the numbers. When we did this with Uber’s Q1/2023 call, we got even more excited about the stock. 

Uber is on its way to profitability. A few tidbits from the call:

• Uber is profitable in 15 of its top 20 Delivery markets. 
• In six of those markets, the company is ahead of its internal long-term benchmarks. 
• Members of the company’s monthly subscription service, Uber One, are profitable. 
• Uber One members account for 27% of bookings. Uber’s goal is to bring that number to more than 50%, something it has already done in some cities outside of the U.S. 

Based on our read of the call, Uber is solidly focused on growing market share and dominating its spaces at the same time as moving towards profitability. 

Don’t ignore Uber’s Advertising business. It’s one of the emerging spaces in the company’s business. And a huge reason why we’re so bullish on the stock as it creates an Amazon-like ecosystem. 

Also from the call:

• The number of advertisers on the Uber platform grew 70% to 345,000. 
• The company is increasing advertising market share in 9 of its top 10 global markets. 
• It’s using car top advertising in select cities, such as New York, that generates revenue for the company as well as drivers. 
• And, from the company’s earnings press release, Uber Eats continues to expand advertising opportunities, even for “non-Eats merchants,” via Post Checkout ads. 

The Bottom Line: There hasn’t been a business like this in a long time. One that can touch a large swath of consumers every single day, several times per day. 

Uber runs in spaces (rideshare and delivery) that generate endless amounts of user data thanks to all the potential and regular touchpoints. It can harness this data to get its users to ride more, order more and become Uber One members. It can leverage this data to sell targeted advertising in an environment where brands need to know they’re getting the most bang for their buck. Personal and corporate budgets are tight, so spot-on targeted advertising matters more than ever. 

And Uber’s story remains in the early innings. This is why we love the stock as one of the top names to own in 2023, particularly for long-term investors.

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