Uber Earnings—Look for a High Implied Volatility Announcement
Uber Earnings—Look for a High Implied Volatility Announcement
By:Mike Butler
The company has exceeded earnings-per-share estimates by 100% for two straight quarters
- Uber is set to report quarterly earnings before the market opens on Wednesday, and an earnings-per-share (EPS) of $0.70 on $11.61 billion in revenue is expected.
- The company has a 7% implied stock price range for this week, and has exceeded EPS estimates by over 100% two quarters in a row.
- The company, a target for autonomous driving technology, could be the reason for the recent rally while other stocks sold off during tariff turbulence.
Uber (UBER), one of the most popular ride-share companies on the planet, will report quarterly earnings Wednesday before the market opens. The company has shown some epic performance in recent quarters, exceeding earnings-per-share (EPS) estimates by over 100% in the last two announcements. While the rest of the stock market sold off in April, UBER stock rallied from a low of $60.63 to $86.57. The stock currently sits around $86, just off the all-time high of $87 realized in October 2024.
This quarter, Uber is expected to announce an earnings-per-share (EPS) of $0.70 on $11.61 billion in revenue.
When Uber and Lyft (LYFT) became popular, the whole idea of how we get around changed. I'm not sure of the last time I took a taxi anywhere, which shows the power of rapid change in the tech-based world. Now, autonomous car manufacturers are racing to become the first to pair with ride-share companies. Before Uber, I couldn't imagine getting into a strangers car and having them drive me around. Now, I can't imagine a car without a human sitting in the driver seat bringing me from point A to point B. But it'll happen eventually and nobody will blink an eye.
Dara Khosrowshahi, Uber CEO, mentioned autonomous driving in the latest earnings call: “Uber ended 2024 with our strongest quarter ever, as growth accelerated across MAPCs, trips, and Gross Bookings. Our performance has been powered by rapid innovation and execution across multiple priorities, including the massive opportunity presented by autonomous vehicles. We enter 2025 with clear momentum and will continue to be relentless against our long-term strategy.”
Prashanth Mahendra-Rajah, Uber chief financial officer, offered strong positive sentiment after hinting at stock buybacks in the future: “Record demand in both mobility and delivery helped us grow gross bookings faster than the high end of our guidance for gross bookings, adjusted EBITDA and free cash flow ... We believe we remain undervalued despite these strong fundamentals and plan to be active and opportunistic buyers of our stock.”
Some strong words coming from Uber executives, and these companies are somewhat recession-proof when you really think about it. People that need to get places in the most cost-effective way will opt for public transportation when they can, but Uber rides are certainly less expensive than owning a car and the maintenance and insurance costs that come with that.
The UBER options market reflects high implied volatility for this week's earnings call and is projecting a +/- $6.32 implied stock price move through Friday. Clocking in at around 7% of the notional value of the stock price, this earnings call could move the stock to new all-time highs.
Looking to the July options cycle, we can see a +/- $11.89 implied stock price range. This tells us the market is placing a pretty large weight on this earnings call, considering it accounts for over 50% of the implied stock price range for the next 74 days.
Bullish on Uber stock for earnings
If you're bullish on UBER stock for earnings, you're looking for another impressive performance with EPS and revenue beats. It feels early, but if the executives can shine any light on the potential or timeframe for autonomous cars entering the uber system, that could create a frenzy in the ride-share world, with the stories making headlines globally. That is precisely what bulls want to see, but they could also find solace in the hint at stock buybacks going forward from the CFOs commentary in the last earnings call.
Bearish on Uber stock for earnings
If you're bearish on UBER stock for earnings, you're looking for an EPS or revenue whiff. If the company fails to capitalize on the momentum they've realized over the past month reflected in the stock price, we could see the stock retreat from highs. The executives were super bullish in the last earnings call, but if the tone changes this time around, I can't see how that could be good for UBER stock.
In a few day's we will see how the stock will react to the earnings call, but join us on Options Trading Concepts Live tomorrow at 11 a.m. CDT for some options trading strategy ideas ahead of the earnings call on Wednesday morning.
Mike Butler, tastylive director of market intelligence, has been in the markets and trading for a decade. He appears on Options Trading Concepts Live, airing Monday-Friday. @tradermikeyb
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