Struggle To Profitability Continues
Uber Technologies Inc. (NYSE:UBER) stock has been on a downward spiral having lost 35% since its IPO. The company has continues to grapple to demonstrate a path to profitability and investors are pessimistic about the company. As a result, investors will be looking at the Q3 2019 earnings when the company reports its results on November 4.
Analysts expect Uber to post losses in Q3
When the company releases the results on Monday analysts expect the company to post an adjusted loss of $0.83 per share on revenue of $3.75 billion. This is however not surprising considering losses are common for tech companies in the growth phase. However, the major concern among investors is the lack of a clear strategy to turn the company into profitability.
The uncertainty about its path to profitability has led to the stock to continue bleeding. With the earnings report, the company should drive out the notion that its business is softening. When the company reported its Q2 earnings there was no assurance on the same with adjusted YoY revenue dropping 12%.
Uber CEO optimistic of about growth of the platform
Although the company is facing profitability challenges its CEO Dara Khosrowshahi holds a different view. Khosrowshahi is urging investors to concentrate on the capability of Uber’s evolving platform. He says that the platform will soon be part of the biggest transport ecosystem. This includes the fast-growing Uber Eats segment, Freight delivery, ride-sharing services electric scooter and driverless cars.
Uber’s latest addition to the expansion of its services is Cornershop. This is a service helping food retailers, pharmacies and supermarket chains to deliver their products. This is perhaps possible considering the tech company has revolutionized how people move around in major cities.
The company controls around 65% of the ride-sharing market in Europe, Latin America, Australia, and North America. However, there is growing competition from other emerging ride-sharing companies. Uber’s largest competitor is Lyft Inc. (NASDAQ: LYFT) which is almost turning a profit. On Wednesday Lyft released Q3 results that topped analyst forecasts.