Skip to Content
Stock Analyst Update

Uber's Delivery Demand Stays Strong, Mobility Suffers

We are maintaining our fair value estimate for the narrow-moat company and view shares as attractive.


Uber (UBER) reported mixed second-quarter results as revenue came in above FactSet consensus estimates while operating losses were higher than expectations. The firm continues to benefit from its relatively diversified revenue base, with the delivery segment (previously Uber Eats) helping offset weakness in the mobility segment (previously Rides). While some countries are showing signs of improvement, we remain doubtful about a quick recovery in mobility demand amid fluctuating waves of coronavirus infection. In the meantime, growth in delivery and the implementation of cost controls should help the firm to progress toward profitability. We think the firm’s network effect moat source remains intact as the delivery segment generated growth in diners, orders per diner, and gross sales per restaurant. According to Uber, improvements in mobility demand in July didn’t hurt demand for delivery services. We have lowered our projections due to further uncertainty regarding the mobility segment, but our fair value estimate remains $48. While the stock has come up 135% from its March lows, it remains 4-star-rated.

Total gross booking during the quarter declined 35% year over year, driven mainly by the 75% decline in mobility and partially offset by 106% growth in delivery. Uber’s overall adjusted take rate dipped 130 basis points from last year as revenue shifts to the lower-take delivery business. Total revenue of $2.2 billion was down 29% from last year. Uber’s monthly active platform consumers, or MAPCs, declined 44% from last year to a mere 55 million as demand for mobility declined due to the pandemic. However, with strong growth in demand for delivery, Uber’s MAPC monetization went up 27% from last year.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

Ali Mogharabi does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.