Assessing Uber Technologies (NYSE:UBER) Valuation After Recent Share Price Weakness

Why Uber Technologies (UBER) is on investors’ radar now

Uber Technologies (UBER) is drawing attention after recent share price moves. The stock is up 1.3% over the past week but has shown double digit declines over the past month and past 3 months.

See our latest analysis for Uber Technologies.

That short term weakness, with a 30 day share price return of 10.27% decline and a year to date share price return of 10.86% decline, sits against a much stronger 3 year total shareholder return of 121.14%. This suggests longer term holders have still seen substantial gains even as recent momentum has cooled.

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With shares down over the past month yet still showing a 3 year total return above 120%, plus analyst and intrinsic estimates that sit well above the last close, you have to ask yourself: is there real value here, or is the market already pricing in Uber’s next leg of growth?

Most Popular Narrative: 1.3% Overvalued

According to the most followed narrative, Uber Technologies’ fair value sits at $72.92, slightly below the last close at $73.86, which points to a very mild premium.

Uber’s revenue is expected to grow at an annual rate of 13%. Uber’s earnings are expected to grow at an annual rate of 32%.

Read the complete narrative.

Curious what kind of profit margins and future P/E multiple are needed to back that price? The narrative leans on ambitious scaling assumptions and a premium earnings profile that are worth seeing in full.

Result: Fair Value of $72.92 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that story can shift quickly if regulatory pressure on gig worker classification tightens, or if competitors push into key markets and squeeze Uber’s margins.

Find out about the key risks to this Uber Technologies narrative.

Another View: Cash Flows Point to a Very Different Story

That user narrative pegs Uber Technologies at a fair value of $72.92 and calls the stock slightly overvalued, but our DCF model paints almost the opposite picture. Using future cash flow estimates, it lands on a value of $171.09, which is a very large gap to the current $73.86 price. So which lens do you trust more when the story swings this far?

Look into how the SWS DCF model arrives at its fair value.

Next Steps

If this mix of signals leaves you torn, take a closer look at the underlying data, act while sentiment is fresh, and review the 5 key rewards before deciding.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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