After ride-hailing and delivery platform Uber Technologies Inc. reported quarterly results last week, analysts began leaking information.
They praised the company’s steadier profitability and prospect of an investor payment plan, growth in demand for rides and gains in the segment that allows other companies to advertise on the app. And they cited its potential to become a bigger part of local economies by transporting more people, takeout, groceries and other goods from place to place. One said Uber UBER
it had “just started flexing its platform muscles.”
Over the next week we’ll see whether the praise extends to some of Uber’s smaller rivals in the gig economy.
Uber’s main rival, Lyft Inc., will release results Tuesday, as will online grocery delivery service Maplebear Inc., better known as Instacart. Food delivery app DoorDash Inc. reports Thursday. Taken together, these findings will offer a more complete picture of gig work and delivery demand.
Ride-sharing has seen a recovery since the pandemic, and analysts have generally said that a return to more “normal” trends benefits Uber. But spending on online grocery delivery slowed last year, according to analysts at Oppenheimer, after a pandemic-era boom in demand.
Meanwhile, customers continue to complain about skyrocketing food delivery costs, and drivers, largely stuck in less generous contractor roles, are still fighting for better pay and benefits. And online advertising, where outside companies pay a company like Uber or DoorDash DASH
for ad space in their apps – could become a more important sales driver for those platforms as they navigate the ebbs and flows of consumer demand elsewhere.
Elevator ELEVATOR
will report as it tries to distinguish itself from Uber, focusing on things like services that give employees rides to and from work and services for women and non-binary drivers and passengers. In a bid to lure drivers, the company said last week it would pay its drivers at least 70% of the fare paid by travelers, net of external commissions. Lyft also said it will provide drivers with more detailed analysis of passenger fares.
Meanwhile, Instacart stock CART
have fallen since the IPO price and its customers are still suffering from the jump in food prices in recent years. But Wedbush analysts liked the company’s recent move to offer Google Shopping ads to its advertising partners, and said that such ads – which take shoppers from Google to Instacart when they click on them – would help Instacart capture a largest share of advertiser spending.
Analysts at Jefferies, meanwhile, upgraded DoorDash DASH shares
last month, saying its increased focus on advertising and delivering items from grocery and convenience stores would help profits over the next two years.
This week in earnings
More than two-thirds of companies in the S&P 500 index released results for the most recent quarter, FactSet said in a report on Friday. For the week ahead, 62 companies in the S&P 500 index report results in the week ahead, including two from the Dow, the report said.
Following difficulties at McDonald’s Corp. MCD,
who claimed that conflict in the Middle East had hurt business and that low-income customers were spending less, we’ll hear about chains like Shake Shack Inc. SHAK,
Wendy’s Co. WEN
and Krispy Kreme Inc. DNUT.
Cryptocurrency exchange Coinbase Global Inc. COIN
will also report, amid questions about the impact of new Bitcoin exchange-traded funds and regulatory scrutiny.
DraftKings Inc. DKNG sports betting platform
will report earnings immediately after the Super Bowl, while clog and sandal maker Crocs Inc. CROX
will report on the back of a more optimistic outlook last month. Beverage giants Molson Coors TAP
and Coca-Cola Co. KO
also report, as does the accommodation platform Airbnb Inc. ABNB
The call to put on the agenda
Last week, Mattel Inc. MAT
said it was cutting costs as the confetti disperses after the success of the “Barbie” movie and the company looks down on a year in which toy demand is expected to be weaker, partly due of a thinner film pipeline. We’ll see whether that presents any opportunities for archrival Hasbro Inc. when it reports results for the key holiday quarter on Tuesday.
Games like “Dungeons & Dragons,” “Magic: The Gathering” and the video game “Baldur’s Gate III” have been strong points for the company. And as both Mattel and Hasbro look to increasingly turn their toys and games into movies and TV shows, Hasbro HAS executives in October said
had more than 30 entertainment-related projects in the works, such as “Transformers One” and the animated series “Magic” on Netflix. But the company is looking to squeeze elsewhere. In December, the company sold its Entertainment One film and TV business to Lionsgate for $375 million and announced another round of layoffs. However, it also declared a dividend.
The number to watch
Cisco Orders and Sales: Network and cloud services giant Cisco Systems Inc. CSCO
will report quarterly results on Wednesday. These findings will come amid questions about possible strategic missteps, post-pandemic demand and competition, and how many customers have already purchased the products they need from the company.
In November, the company cut its full-year sales forecast. CEO Chuck Robbins said at the time that the company has seen a slowdown in new orders, adding that “our customers are now focused on installing and deploying these unprecedented levels of products.” Needham analyst Alex Henderson said the forecasts “solidify our view that Cisco is losing share in its core business.”
Wall Street will seek greater clarity on the path Cisco might take amid modest expectations. On Friday, they had a possible clue: Reuters reported that the company is planning “thousands” of job cuts as it focuses on business areas with greater growth potential.