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Hype Asset of the Day | November 16th, 2022



Uber Technologies, Inc. (NYSE: UBER)

Uber started out as a ride-hailing service. Its objective was to use technology to enable customers to book a ride with the tap of a finger, and it's safe to say the company succeeded in its mission. But Uber also developed and made adjustments in response to many of the difficulties it encountered, and it now has a variety of high-quality, diverse revenue streams. San Francisco-based Uber Technologies, Inc. offers ride-hailing, food delivery, package delivery, courier services, and freight transportation in addition to mobility as a service. With a strong earnings report from the recent third quarter, Uber has seen an increase in mentions by 78% over the last day, prompting investors to wonder whether it’s a good time to take a position in the company now. Currently, shares trade at $31.51.


Positive Hype

Uber, a company so popular that its name has become a verb, has done super well for itself post the pandemic - here are some of the reasons why it generated positive hype based on its success.


  • The ride-hailing company produced $8.3 billion worth of sales during the third quarter of the year.


  • Additionally, trips during the quarter grew 19 per cent from a year ago to 1.95 billion. Approximately, 21 million trips per day on average. During this time, its operating loss narrowed slightly too year over year, falling 13%.


  • Uber's third-quarter revenue rose more than 70 percent compared to a year ago. Revenue in the ride-hailing segment grew by a whopping 73% year over year during the third quarter, and it generated more than its delivery segment for the first time since before the pandemic.


  • With that said, it appears the convenience of food delivery stuck with consumers because Uber still managed to grow that piece of its business by 24% year over year in Q3.


  • Uber’s smallest segment, the freight segment, generated $1.8 billion in revenue for the quarter, which was a whopping 336% jump compared to the same period last year. By utilising the practicality of its flagship platforms to create a global delivery network, Uber has so far managed $17 billion in freight with the help of about 200,000 users.


  • Uber is making a conscious effort to move toward profitability. It was cash-flow positive in the second quarter for the first time ever, and it also hit the mark in the third quarter.


  • Overall, bookings for Uber were up. Gross bookings are up 32 per cent constant-currency basis. Mobility gross bookings of $13.7 billion were up 45 per cent. Delivery gross bookings are up 13 per cent.


  • The size of Uber's customer base rocketed to an all-time high of 124 million monthly active users, and they generated $29.1 billion in total bookings, which was also a quarterly record for the company.


  • Uber posted a user-count growth rate well above 20%, taking away market share from its rival company, Lyft.


  • Uber reported $90 billion in gross bookings in 2021 and management is still targeting $170 billion at the midpoint for 2024, which implies a positive outlook for the future.

Negative Hype

No investment, no matter how great it may seem, is free of risk. Here are some reasons why you might not want to take a position in Uber based on negative hype.


  • The company is still losing $495 million on an operating basis and $1.2 billion after counting all of last quarter's booked costs.


  • Uber's cost of sales increased to the tune of 121%, These costs ate up 62% of Uber's Q3 sales, up from the year-ago comparison of 50%.


  • Uber's R&D expenses, meanwhile, were up 54% year over year during Q3, with its general and administrative costs growing 45% in the same time frame.

Conclusion

Uber, like the majority of rapidly expanding technological businesses, sacrificed profitability to invest in development and expansion, which might produce huge long-term benefits. However, in light of the challenging economic environment, the corporation set a goal for itself to reduce losses and operate more efficiently. Uber maintained strong growth rates across its business despite a better financial picture, providing investors with a solid balance between leaner operations and the possibility of large returns at the same time. It may be a good idea to get involved now since it is currently 51% off its all-time high.



HypeIndex is an AI platform that detects Hype in stocks and cryptos before it moves the market, providing reliable early detection for profitable investment opportunities.

The algorithm for our proprietary HypeIndex score is based on sentiment analysis, data science and machine learning.




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