Uber Earnings Analysis: Diverging Performance Amid Consumer Weakness Concerns

The Reddit post warns that Uber is trading near all-time highs while restaurant peers have re-priced for consumer weakness, particularly citing Chipotle’s weak traffic among Uber’s core 25-35 year old demographic[1]. The post argues that expectations are high and delivery (representing 32% of revenue) could slow, potentially triggering a 10-15% correction if earnings miss or guidance is cautious[1]. Bearish volume divergence was also noted as a technical concern.

Key counterarguments from Reddit comments include:

• Restaurant stocks may not be comparable to Uber due to significant business travel revenue[1]
• Chipotle’s weakness may stem from price hikes and quality issues rather than macro weakness[1]
• Uber’s revenue diversification across eats, mobility, ads, subscriptions, and regions makes simple restaurant extrapolation flawed[1]
• Some users expect only a 3-5% dip at most, viewing Uber as fairly/undervalued[1]

Research data supports several Reddit claims while contradicting others:

: Uber has significantly outperformed both restaurant peers and the broader market in 2024, with 21.48% year-to-date gains versus the S&P 500’s 17.35%[2]. Restaurant peers like McDonald’s, Starbucks, and Yum Brands show more modest performance with some experiencing declines[2].

: Uber’s Delivery segment accounted for 32.7% of operating revenue in 2023, very close to the Reddit post’s 32% claim[6]. However, contrary to concerns about slowing growth, delivery gross bookings grew 20% year-over-year according to recent data[6].

: Analysts do expect overall revenue growth to slow to 18.6% in Q3 2024 from 20.4% in the same quarter last year[8], though this represents modest deceleration rather than the significant contraction implied in the Reddit warning.

: Uber continues to show robust user growth with 180 million users (up 15% year-over-year)[6], and analysts maintain generally positive sentiment with price targets ranging from $82-$150, averaging around $108.88[3].

The Reddit warning correctly identifies Uber’s outperformance relative to restaurant peers and the significant contribution of delivery to revenue. However, research findings suggest the projected 10-15% correction may be overstated:

• Agreement
  : Uber is indeed outperforming restaurant peers, and delivery represents roughly one-third of revenue
• Contradiction
  : No clear evidence of significant delivery growth slowdown or restaurant traffic decline severe enough to trigger a major correction
• Nuance
  : While revenue growth is expected to decelerate modestly, delivery bookings continue growing at 20% YoY

The business travel component highlighted in Reddit comments appears to be an important differentiator that may insulate Uber from pure consumer discretionary weakness affecting restaurants.

:

• Elevated expectations could lead to volatility if Q3 results miss consensus estimates
• Consumer weakness among core demographics could eventually impact both mobility and delivery segments
• Revenue growth deceleration, while modest, may pressure valuation multiples

:

• Strong market position in delivery (23-24% share vs. DoorDash’s 56-59%)[2] with continued growth
• Diversified revenue streams including emerging advertising and subscription businesses
• Potential margin expansion from AI deployment and operational efficiencies
• Business travel recovery could provide additional upside beyond consumer trends

The upcoming earnings report will be critical in validating whether current growth trajectories can be maintained amid broader consumer spending concerns.