Uber raises forecast, Lennar dives amid supply shortage, Nvidia stock caught in Evergrande fears

Brian Sozzi, Julie Hyman and Emily McCormick break down Tuesday’s stocks in motion, including: Uber shares see market leap amid more bullish outlook for the company, Lennar shares dip as channel constraints supply continue to weigh on the company, and Nvidia finds itself caught in the Evergrande crisis.

Video transcript

Definitely good news here that we see from Uber, of course. The action rose in the pre-market maintaining these gains, now extending them by over 7% in this opening trade here.

And one of the things the company said Wall Street is really focused on is that it now expects Adjusted EBITDA to be between a loss of $ 25 million and a profit of $ 25 million. dollars for the third quarter. Now that ends in September for Uber. The company also said in its filing that it had already seen monthly profitability from Adjusted EBITDA in July and August.

So it will really be in September. This is the deciding factor here for Uber in terms of reaching this profitability benchmark.

And one thing I want to highlight here is actually a note from Rohit Kulkarni of MKM Partners. He mentioned in a note this morning that he actually expects Uber to take advantage of the forfeiture and unemployment benefits that we saw federally nationwide on September 6, as it might actually reduce some. of those incentives to drivers here for Uber.

And something to really watch out for here as we watch Uber move towards profitability and try to hit that benchmark as its main competitor here in the US. Lyft has already hit in its latest second quarter results.

Yes, and the reason Lyft hit it is because Lyft doesn’t trade in food. And again, I come back to the narrative with Uber and Lyft that fascinates me, that is, the narrative was that Uber was a stronger company because it was more diverse, right? ? At one point.

And then it became a disadvantage rather than an advantage. Even during the pandemic, right, where he still had income because of the food industry. But the other side of that is, this food business is less profitable on a margin basis than the rideshare business.

And what has happened now is that we are hopefully starting to come out of the pandemic is that even though people are out and pretty much more, they are still in order. And so they always keep this relatively small margin. we’ll sort of see where that balance is for Uber, especially since we hear a lot, on an anecdotal basis, of many complaints about Uber’s accessibility at this point and the price of Uber at this point. So we’ll have to see how it all plays out over the next two quarters.

Yeah, I’ll just add quickly before I move on to Lenore, Julie. Uber noted gross bookings. Thus, forecasts slightly raised on the low end for Uber in terms of gross bookings. Now looking for $ 22.8 billion to $ 23.2 billion.

They were previously $ 22 billion to $ 24 billion. You know, I think this advice from them really reflects their cutting a lot of expenses. It’s not that the economy is booming.

I would say at least that this report only reflects the continued downturn in the US economy here. It’s just that a company like Lyft and an Uber. They got really good at cutting expenses and then guiding the street and analysts towards those revised expectations.

But Julie is shifting gears here to some news that I would call austere. Another homebuilder this morning, or last night with – with not – not a good look. Warning of continuous supply chains – supply chain challenges and that is in fact the norm.

Yes, and that again comes down to a theme we’ve talked about a lot, which is the challenges ahead for US businesses to meet demand or supply. And this one, again, speaks to the idea that it will be supply-driven.

Because Lennar says demand is still strong. In fact, CEO or sorry, Executive Chairman Stuart Miller said in the release, despite the absence of our delivery forecast, demand for new homes remains strong even as the market returns to traditional seasonality. Orders increased by 5% compared to the previous year.

The company’s gross margin was the highest in its history. That said to get back to the more negative part of the news, the company’s 15,199 shipments. That’s 600 below the lower end of its forecast.

But again, it’s because of supply chain issues, it’s also because of labor shortages. Just because there aren’t people out there who want to buy the houses, doesn’t mean you guys.

Well, Jillian, I think about your point on people who still want to buy these homes, I think if we look at the economic backdrop that we see now. Of course, we saw a slight downturn in housing market activity in late spring and early summer. But I’m just pointing out some of the data that we released this morning.

Housing starts and building permits both advanced better than expected. I think that bodes well for a lot of these home builders like Lennar. Of course, being one of the main ones.

But again, housing starts rose 3.9% in August. Building permits up 6%. We expected a decline of 1.8%. It was actually the biggest gain we’ve seen here since January, which was, of course, before we started to see these interest rates go up and some of these supply chain and commodity constraints. material shortages come into play.

Again, Lennar really points to some of these trends specific to the company, as well as the industry as a whole. But if we take a look at the macroeconomic landscape, we at least start to see a small improvement over what economic data is telling us at the national level.

And shift gears here, guys. I also watch on video. This has been one of the main trend indicators over the past 24 hours here on the Yahoo Finance platform. In the video that was touched up yesterday, I am assuming that they are making mining equipment for cryptocurrency trading.

Of course, Bitcoin continues to be under pressure. And Vidi also has good exposure to China. And NVIDIA still comes out of the door a little weak today.

Now we have seen that we are seeing further weakness in major industry indices since the market opened a few minutes ago. But NVIDIA comes out the door. Not a lot of conviction in there to buy this weakness yesterday.

I also now see a similar vibe, a vibe. I get this word vibration for other semiconductors here.

Broadcom TTY – the TTY is AVGO. It’s now down slightly AMD under pressure a bit. So if you are concerned about what is happening in China, you should pay close attention to the semiconductor space.

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