On Thursday, Uber (NYSE:UBER) will reveal its first earnings report since turning into a public company, having many investors wondering how the report will affect the company’s stock.
Earlier this month, Uber debuted its stock that took the title of being the biggest initial public offering flop of the year. That’s not the name you want to be tied to your company as you just open up your stock.
You would think that the stock would jump back, maybe it was beginner’s bad luck. However, as the new week began on May 13, Uber’s stock once again fell from their already low price. In the stocks very first week of conception, it opened at $45 and dropped 8% to $41.57 by Friday. The following week when the market opened on May 13, Uber’s stock fell 11.7% to $36.71.
Although many can contribute the stock market volatility to the revamped trade-war talks between the United States and China, investors are wary of the ride-sharing stock. The size and potential for the stock, and the company’s ability to earn a bit of cash from its food and package delivery service, have investors quite skeptical with the stock’s success.
Uber wasn’t the only ride-sharing company that saw a slump with their stock. Lyft (NASDAQ:LYFT) also reported first-quarter losses that topped $1 billion. Lyft’s shares were down 3.82% at $49.14 earlier in the trading day and ended on the Friday down 7.4% at $41.09.
With that news about Uber’s competition and the lack of enthusiasm in the stock’s performance, you can see why investors are hesitant on the success of Uber’s stock.
Investors have started betting against Uber, with those bets rising to $1.5 billion.
Uber has down quite a bit of borrowing in the last week. There was over 160% increase in Uber shares on loans in the last two weeks alone, going from 36 million to a whopping 13.6 million.
There’s still time to short the stock. However, with 70% of the short float already snatched up, there isn’t much time left to bet against the company.
If you were thinking of investing in Uber’s stock, unless you’re planning to short it, you may want to hold off on that investment. Things aren’t looking too good for the ride-sharing company’s stock.
Now, Beyond Meat Inc (NASDAQ:BYND) on the other hand, their stock is one to watch out for. The meatless meat company’s stock, which has gained significant popularity in the last bit, has gained 244% since its May 1 IPO. Beyond Meat’s numbers crush that of Uber and Lyft.
As for Uber, though, the earnings report coming out tomorrow will have a lot to prove. We know that the company’s revenue target was between $3.043 million and $3.104 million, which is an 18% to 20% increase in what it was the year before. That’s a comfortable increase, except that the number is a decrease from the 44% top-line growth the company achieved for all of 2018.
The ride-sharing company’s popularity is still growing, with gross booking expected to rise by 33% to 35%. However, the amount of money going back into the company is on the decline, especially from the Uber Eats addition.
Driver incentives for both Uber and Uber Eats are eating into the company’s profits. If it wasn’t for those incentives though, would they have gotten the drivers to meet the demand of bookings?
What we do know, though, is a company that has a slow top-line growth mixed with growing losses is a bad combination. Uber will have some work cut out for them tomorrow, and in the coming days. If their earnings report doesn’t wow investors, it could be hard on the company’s new stock.