'Herculean-like challenges looking ahead': Here's what 4 analysts are saying ahead of Uber's first-quarter earnings report

Price target: $60

Rating: Outperform

"The guidance withdrawal was unsurprising, and given COVID-19 headwinds, the vast majority of investors had already ruled out the possibility of consolidated EBITDA breakeven by 4Q20," Evercore ISI analysts led by Benjamin Black wrote in an April 17 note.

"The company pointed to incremental contra revenue of $17-22mn and $60 -80mn in Q1 and Q2 respectively, associated with financial assistance to drivers and delivery people impacted by COVID-19. As such, take rates likely see a meaningful contraction, particularly in the 2Q, where the detrimental revenue impact is likely most severe," he wrote.

"While the financial assistance program increases cash burn by ~$80-100mn, investors likely look through the impact to take-rates, revenue, and EBITDA since it is not reflective of the underlying fundamentals given its one time nature. Longer-term, this program could support driver loyalty, lowering the need to incentivize drivers to join/remain on the platform."

Price target: $30

Rating: Buy

"Uber and Lyft face Herculean-like challenges looking ahead as the new reality will likely change the business models of these companies (and competitors) for the foreseeable future," wrote Daniel Ives in a Tuesday note.

"Even in food delivery while consumer demand is there, competition is driving meaningful pressure on profitability. With drivers and customers likely required to wear masks during rides and concerns around previous occupants of vehicles, there is a segment of the population that will no longer use these vehicles."

"As Uber is exposed to earlier-hit markets in Europe and Asia, we expect demand for the company to have been more greatly impacted than Lyft in 1Q20E, with a 38% Y/Y decline in MAPCs vs. a 30% decline in riders for Lyft."

"In our view, Uber is more exposed to a prolonged overhang in areas like international and business travel, but we ultimately believe that both companies are likely to face a similar (and peak) level of operational headwinds in 2Q20E, where we project a Y/Y Ridesharing revenue contraction of -69% for Uber and -66% for Lyft."

Price target: $40

Rating: Buy

"Uber has communicated near-term bookings pressure and higher industry losses, and we think the crisis will ultimately strengthen its competitive position, given its stronger balance sheet & market share leadership," wrote Justin Post of Bank of America in a Tuesday note.

"Uber has made significant adjustments recently to adapt to COVID-19. Uber has suspended its Pool service in the US and Canada, as well as London and Paris," Post said. The company has also implemented contactless delivery, and started giving drivers that test positive two weeks of compensation.

"New rounds of cost cutting also appears to be in focus and could be outlined on the 1Q call," Post wrote. "We continue to view Uber as well positioned given low penetration of Online transportation services and strong global market share."

Price target: $48

Rating: Buy

"Uber has provided several updates on the impact of COVID-19 on its business since the pandemic began," wrote Maria Ripps of Canaccord Genuity in a May 3 note. "In mid-March, the company confirmed that COVID-19 had significantly impacted the rides business, that markets impacted early on have also recovered quickly, and that Eats was performing solidly in the current environment."

"Uber also provided a liquidity update, reminding investors of the strength of its balance sheet and the highly variable nature of its cost structure."

"Investors will likely be looking for an update around the business recovery and updated thoughts on the timeline to reach EBITDA profitability given the impact from the coronavirus."