Last Update08 Jul 25Fair value Decreased 13%
SlaterWealthManagement has decreased timeframe from 5 years to 3 years.
SWOT Analysis
S: Growing in popularity and suitable to the younger generation. Metro areas are having a decrease in car ownership due to cost of vehicles and the cost to park.
W: Revenue per driver ridesharing
O: Expansion into emerging markets, along with developed nations. Ability to grow their services into other products and services. Efficiency of self driving vehicles and profitability. 87B revenue industry.
T: Regulation, ESG, Adaptability to self-driving vehicles, barriers to entry in new markets.
Catalysts
- Partnerships with AV companies brining across the globe, expanding on delivery and mobility.
- Massively reducing costs, eventually eliminating them and expanding on gross margins, net profit, and free cash flow.
- Operate 24/7 without breaks, significantly increasing vehicle utilization.
- Continue to not own vehicles on balance sheet, as these are through partnerships (has the network and infrastructure to best support AV companies)
- Expanding into new Product offerings, while continuously growing main ride sharing platform.
- Uber Eats is now a major player in the food delivery industry, and can venture into retail, pharma, and grocery delivery fairly easily.
- Uber freight has the potential to digitize the fragmented trucking industry. If uber can leverage its technology.
- UBER One continuing high retention, recurring revenue stream, creating a 'sticky' customer base, expanding on this could lock in even more users.
Risks
- If the consumer base on UBER begins to leave the platform for another, this would make AV deals difficult to come by.
- Economic contraction, ie. job loss, inflation, general systematic risks
- Getting shut out of other countries
Valuation
- Revenue expected to grow at 15% for next 3 years and profit margins expected to stay in a small up-trend
- P/E Multiple is on its low end, currently at 14.9, with a historic average of 65.19. The extreme PE's were as UBER was becoming profitable and consistent, however, now that they are PE can be expected to float around 13 to 30.
- 3 Year: 13 PE: $87.02 | 21.5 PE: $143.92 | 30 PE: $200.81
- 5 Year: 13 PE: $116.16 | 21.5 PE: $192.11 | 30 PE: $268.062024 Received special revenue skewing PE slightly.
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Disclaimer
The user SlaterWealthManagement has a position in NYSE:UBER. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
