JP Morgan Analyst Affirms Confidence In Uber: Mobility Expansion And Efficient Delivery Drive Optimistic Outlook

JP Morgan analyst Doug Anmuth maintained an Overweight rating on Uber Technologies, Inc UBER.

Uber reported second-quarter Gross Bookings of ~$40 billion, +21% foreign exchange neutral year-on-year, slightly above JP Morgan’s estimate of $39.8 billion, and ~1% above the mid-point of the $38.75 billion-$40.25 billion guide, driven by Monthly Active Platform Consumers (MAPCs) up +14% Y/Y to 156 million. The frequency accelerated ~75bps Q/Q, up +6.4% Y/Y to 5.9x.  

Mobility Gross Bookings of ~$20.6 billion (+27% foreign exchange neutral Y/Y) was 2% above JP Morgan’s estimate of $20.2 billion (+26% foreign exchange neutral Y/Y) due to continued penetration into new geographies, use cases, and continued frequency growth.

Uber also highlighted growing autonomous vehicle (AV) trips on the platform by 6x Y/Y and reiterated that it would be a crucial partner for the commercialization of AVs.

Delivery Gross Bookings of $18.1 billion (+17% foreign exchange neutral Y/Y) were slightly below JP Morgan’s estimate of $18.2 billion (+17.5% foreign exchange neutral Y/Y). This was driven by unit volume growth, and based on 3P data, it gained CP in all top markets.  

Anmuth noted Uber could continue to grow the Delivery category profitably as it looks to improve network efficiencies, scale advertising, and strengthen marketing and incentive optimization.

Uber again beat the high end of the EBITDA guide, with second-quarter EBITDA of $1.57 billion ~3% ahead of the top end of the $1.45 billion-$1.53 billion guide on Delivery margins of 3.24% vs. JP Morgan estimate of 3.05%, offset by Mobility margins of 7.62% versus JP Morgan estimate of 7.82%.

Overall, Anmuth is encouraged by solid foreign exchange neutral growth, Mobility acceleration, Delivery profitability, and continued focus on profits and free cash flow, which are evident in the numbers. The analyst noted the stock should trade up, particularly given the recent weakness.

Uber guided to third-quarter Gross Bookings of $40.25 billion—$41.75 billion (18%- 23% foreign exchange neutral Y/Y), compared to JP Morgan’s estimate of $41.4 billion. Uber’s third-quarter EBITDA guide of $1.58 billion—$1.68 billion came in slightly above JP Morgan’s estimated $1.62 billion.

Price Action: UBER shares traded higher by 11.1% at $64.98 at the last check on Tuesday.

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