Can Uber Make an “Everything” App?

0:01Travis Hoium:Earning season is in full swing and we have good news for investors today. Motley Fool Hidden Gems Investing starts now. Welcome to Motley Fool Hidden Gems Investing. I'm Travis Hoium joined today by Lou Whiteman and Rachel Warren. And this is one of those days during earnings season where there is just a flood of earnings. So we've got some interesting announcements. We're going to talk today about Uber, Disney and Novo Nordisk. Let's start with Uber, Lou. disruption has been on the market's mind in 2026. And that has impacted a lot of software related stocks. Uber is maybe in the crossfire a little bit here.

0:37Travis Hoium:But shares were down about 12 % over the past year. There's worries that Waymo is going to take market share. Tesla is potentially expanding, although we don't know how quickly that's going to happen. But Uber is really taking an interesting strategy here, not only moving into autonomy overall, but also becoming more than a ride sharing company. They've got more retailers. They recently announced hotels on the app and their earnings were pretty good. I mean, they're still growing at 20 ish percent and just compounding that year over year. So when you look at their earnings in the strategy shift that they're going through right now, what do you what do you think?

1:12Lou Whiteman:I mean, look, I love what they're doing. I think the core business looks great. I mean, this whole idea of like and we were talking about beforehand, this everything app that they're creating, moving around. I'll take the under on that, Travis.

1:25Travis Hoium:You don't think that Uber is going to be a one-stop shop for all things mobility-related, whether you're moving people, products, vacation?

1:35Lou Whiteman:Look, it makes total sense. Just like PayPal's Everything app made total sense as your one-stop shop on your phone. Just like Meta, what they tried to do with WhatsApp, especially in developing markets, made all the sense in the world as a one-stop Everything app. X makes perfect sense as a one-stop Everything app. people don't want everything apps. Companies want everything apps because everything means we get all of the revenue. We can expand our business on the back of our customer base. I get that, but customers don't want that. Customers are used to what they're doing. There's really, unless you really, really give them a deal and ruin the economics for you, how do you change just behavior?

2:20Lou Whiteman:And look, it's a great idea. If they're not spending too much, go for it, but it's not going to work. None of these everything apps have worked and this one won't work.

2:29Travis Hoium:Let me push back on that with one example and that's Amazon. Amazon, I think has probably done a better job than any other company becoming the everything app for at least shopping and then throw a little bit of video on top of that, throw pharmaceuticals and all kinds of stuff. You don't think that Uber could potentially do that with sort of their realm. It's not retail, it's more, hey, I need to move myself or I needed to move something around. And that's kind of the core is that transportation as a service.

3:00Lou Whiteman:I sort of reject the premise of that comparison. I don't think, I mean, Amazon is doing a lot of things, but I think more Amazon desperately begs me to do Grubhub through their app. And I don't do it. That's the everything app comparison. And I don't think that works. The fact that Amazon has expanded into new markets, I don't know if that's because they have an everything app. Again, I get the idea of it. But look, if I want a ride share, I'm probably going to go to Uber. To train me to do other things like, oh, I want to book a trip, I'm going to go to Uber. No, I'm going to go to booking. I'm going to go to Delta.

3:38Lou Whiteman:I'm going to go to all of the things I go to. Again, points for trying, gold star. Again, I can't come back to this enough. The core business looks pretty good. So I guess this is when you experiment and go ahead and try, but it's not going to work. We've seen this so many times and it makes so much sense for the companies. The companies fall in love with it because look at all the rest. If we could just get 2 % of this market, that would be so much revenue. Those are the conversations they're having right now. And yeah, I get why they're all slapping themselves in the back, but wake me up when it happens.

4:11Travis Hoium:Rachel, do you think that this is a strategy shift that's fun to talk about, but it's still the core business is really what matters here. You know, revenue was up in the quarter 14 percent. We had gross bookings were up 25 percent. Things seem like they're doing pretty well in the core, like Lou said. But are these ancillary additions going to mean anything? Yeah, I do think the important focus right now is the core business, which is doing exceptionally well. But I think I have a little bit of a different take on this than Lou. I mean, obviously, we're seeing this strategy, right, where they're wanting to shift from being known as the ride hailing and delivery app to maybe become something of a super app, which would center sort of on the entire travel journey, right?

4:51This partnership they have where they're adding hundreds of thousands of hotel listings through Expedia and vacation rentals via Vrbo. This is this idea that we're seeing where Uber wants to be the first app you open, say, when you land in a new city. And that goal, I think, is to create kind of a very seamless experience where you maybe book your hotel, you get a discounted ride there, you order food or forgotten essentials. It's interesting, too, because this is a model that has proven really, really successful in other parts of the world, right? You think of WeChat in China. It's sort of the gold standard of super apps.

5:24You've got a billion users on there that do everything from messaging and paying bills to booking their doctor's appointments. You've got Grab in Southeast Asia, right? There's Gojek in Indonesia. And so this is a model that has been successful in many, many, many markets. Now, in a lot of the Western markets where Uber predominantly operates, this is not so much the type of app that consumers tend to use. And so I think they're trying to see whether the appetite is there. I mean, I think by bundling some of these services, this idea is to create something of a loyalty loop, right? Where maybe you earn credits on big ticket hotel stay, it pays for your daily rides.

6:02There's a lot of incentives with Uber One. There's a challenge though for consumer adoption. And I think that's the biggest question about whether this works for Uber specifically long-term because the model itself works very, very well in other markets.

6:15Travis Hoium:Well, the interesting piece here, Lou, is the Uber one piece. And the analogy that I would make is to Costco. Costco is the company that made this really profitable and huge business out of, they basically run their stores at break-even. That's why they have really low gross margins. That's why their products are cheaper when you go into the store and they build everything around basically being breakeven at the store and making that the best experience they could possibly. And then all the profit comes from those memberships that you pay each year to be a member of Costco. Could something like that work for Uber?

6:53Travis Hoium:I mean, you know, reduce that take rate and say, hey, if we have, you know, 100 million subscribers to Uber one at, you know, 10, 20 bucks a month, that could be a really good business.

7:03Lou Whiteman:It could. But again, I mean, look, this isn't that novel, right? I mean, the difference with Costco is, is at the end of the day, you're getting a really good price on all of these things. And, you know, I mean, I don't know, can with third parties, can Uber manage those margins? But look, I'm flying Delta tomorrow. The second I bought an airplane ticket, Delta said, hey, you want to get your rental car through me? You want to get your hotel through me? And you know what? I didn't. And then I paid for it with a Capital One card. Capital One said, hey, you're taking a trip. Do you know about our Capital One travel app where you can get your rental car and hotel?

7:38Lou Whiteman:Look at what Airbnb has tried with experiences. Tell me. I mean, that's a fine add-on. That is a great pushback.

7:44Travis Hoium:Airbnb has not been successful moving into other areas.

7:47Lou Whiteman:What it takes is that, again, I get why Uber wants to do this. I get why it makes sense. I think the really hard thing is to change consumer behavior. Why does it make sense for me, the consumer, to do it? I get convenience, but I got convenience everything. I can go to booking.com and do it all if I really want convenience. I just think changing consumer behavior is much harder than these companies realize at the time. Again, I go back to, I thought the PayPal everything app was a really good idea. And I do think that if we had followed through on it, probably it would have made my life and everyone's life easier.

8:24Lou Whiteman:And yet none of us did it anyway, because we're stuck in our habits. And I feel like that's what's going to happen here.

8:31Travis Hoium:Can Uber change people's behavior? Just remember that 20 years ago, getting in a random person's vehicle to get a ride across town was a completely foreign concept. But again, yes, it was a convenient.

8:43Lou Whiteman:Right. I didn't have another way I'm used to doing it. It was a foreign concept. I mean, you know, again, yeah, I get it. I love these straw man, you know, reasons why. I'd love to be an optimist here. It would probably be easy to just do it all through one app. But again, I'll believe it when I see.

8:59Travis Hoium:Well, the market is buying it for today. Shares were up about 10 % early in trading. So we'll see if that holds. When we come back, we're going to get to the news from Disney. You're listening to Motley Fool, Hidden Gems Investing.

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10:14Travis Hoium:Welcome back to Motley Fool's Hidden Gems Investing. We got results from Disney this morning and this is one of those companies that's gotten a lot of flack for investors you know shares have really struggled if you look back over the past decade or so they have a new ceo josh tomorrow this quarter i i thought was interesting rachel because there's not a lot of flash there but it is just sort of steady as it goes the company's growing profitability is improving this is what we want to see and disney just seems like the kind of company that the market would love you know you have a lot of these big retailers that the market's saying hey these aren't these companies aren't going anywhere let's let's trade 50 times earnings or disney's not getting the same love from the market but it seems like the results are showing that this business has a ton of staying power yeah i i think it goes to show that sometimes market responses to earnings reports are not always uh logical i mean this was a solid fantastic quarter for the business so we're sort of more of the same or they hit a record 25 billion in revenue that was up seven percent year over year.

11:15So the core business continues to grow at a really solid clip. Operating income for Disney Plus and Hulu jumped 88 percent. You saw the entertainment division grow revenue by 10 percent. And that was notable because they're sort of carrying the weight for the stagnant sports segment, right, that's dealing with a lot of pressure due to rising rights fees. And even though we're seeing, you know, consumer spending fatigue, we're seeing some shifts in international travel experiences revenue rose 7 percent. And part of that was because they increased the average spend per guest. The newly minted CEO, Josh DeBorrow, he's moving fast to really centralize marketing and use AI personalization to keep streaming margins above 10 percent.

11:55He's been cutting costs through strategic layoffs. They're moving forward with that 60 billion dollar investment plan. They're trying to turn hits like Inside Out 2 and Moana 2 into physical destinations. And the takeaway for me here is I think betting on physical experiences is very much a safer long-term play for Disney than, say, trying to enter into sort of this endless content arms race with Netflix, leading into that experiences division, which already accounts for a lot of their overall profit. They're monetizing their fans multiple times. This is proving to be a really consistently profitable strategy, even in a difficult macro environment.

12:32Travis Hoium:yeah Lou it seems like the experiences business tomorrow came from the experiences side of the business so that does seem to be the core I it didn't say that anything was changing strategically but that sports business more and more seems like it doesn't quite fit under the Disney umbrella so maybe we see some changes there but you know it seems like there's a lot of tailwinds for Disney you know I did a little bit of research recently on the Disney experiences and they have a lot of capacity in Florida coming online. That's not to mention the cruise lines and all the other expansions they have around the world.

13:05Travis Hoium:So this may be moving in the right direction for a while.

13:09Lou Whiteman:Yeah. So we're not going to call this a referendum on tomorrow because he was only CEO for 14 days that quarter. So I doubt, you know, but again, I mean, that's good. We don't want it. This looked like a perfectly fine large company report. You know, I mean, look, there's a lot of parts in the investing world where, you know, we're not going to strike up the band for 7 % revenue growth, with high single-digit revenue growth. But given Disney's size, given the fact that, I mean, my big takeaway here is that everything's fine. And with slow and steady, maybe what we needed with Disney, because we haven't gotten that quarter to quarter for a couple of years.

13:45Lou Whiteman:I will say though, I don't know why this big amalgamation of assets is really, should wow investors or excite investors. You mentioned sports. there's a legacy tv business the more and more i look at this company the more and more i think that it would benefit from some more strategic pairings or more strategic kind of uh investitures than i realized we've talked about the legacy tv we've talked about um maybe sports maybe almost all of the streaming i don't you know maybe not get rid of it completely but find partnerships just to focus on, as you say, the experiences, the things to do really well, getting that IP, keeping that IP in-house.

14:31Lou Whiteman:But I don't know if this is ever really going to work as a market wow investment, as is, when it's just this huge bundle of everything. I think maybe the DeMario era might be about what they sell, where they partner, where they decide we don't have to do it in-house. I think that might be what the future is for this company.

14:55Travis Hoium:It's pretty easy to see some value here if you're a long-term investor, though. You know, Lou's probably right. This is not going to be a double-digit 20 % growth company, but the company is growing. Price earnings multiple on a trailing basis is 17. On a forward basis, it's under 15. If we get some sort of, you know, pullback in the market, the market is probably going to like some of these safer stocks that single-digit growth at a, you know, mid-teens price earnings multiple isn't all that bad of a formula.

15:24Lou Whiteman:Well, so the question there is, is that why, if that pullback comes, why does it come? If it comes because the consumer's under pressure, it's probably not going to be Disney yielding into there, right? Because so much of it is the parks and experiences. But yeah, I do think that this is looking more like ballast than exciting. Again, I wonder if there isn't a way to keep the, to not turn into six flags, to keep the natural advantages they have over six flags, but not have all of this completely in house. I do think that, you know, if I'm an investment banker, that's what I'm spending time trying to talk to Disney management about.

16:04Lou Whiteman:I do think there's ways to craft out a middle ground that might make this a more interesting investment while also not giving up on their competitive strengths.

16:13Travis Hoium:Well, the market likes what it hears today. Shares are up 8 % as we're recording, so we'll see where things go in the future. When we come back, we are going to get to some good news for Novo Nordisk. You're listening to Motley Fool, Hidden Gems Invested.

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17:11Travis Hoium:Welcome to Motley Fool Hidden Gems Investing. Novo Nordisk reported earnings as well over the past 12 hours or so. Rachel, this is the area that you follow closely. But as I was looking at this. I was shocked to see Nobunard's stock is down 75 % since its peak in 2024. That is just a crazy fall for a company that I think is still very identifiable with this GLP-1 craze. Things are turning around a little, at least it seems like the market's thinking we got a little bit of good news today. So what did you see from the results? Yeah, I mean, I think the biggest and most obvious takeaway is the oral version of Wegovi that they are selling is proving to be a major volume engine for the business.