Is Uber Technologies (UBER) Offering Value After Recent Share Price Pullback?

• If you are wondering whether Uber Technologies stock still offers good value after its ride so far, this article will walk through what the current price might be implying.
• The shares last closed at US$72.77, with returns of 2.5% over 7 days, a 14.2% decline over 30 days, a 12.2% decline year to date, a 10.3% decline over 1 year and a 110.7% gain over 3 years, alongside a 35.0% gain over 5 years.
• Recent headlines around Uber have focused on its position as a large scale global ride hailing and delivery platform and ongoing interest in how it balances growth investment with the path toward sustained profitability. Those themes help frame how investors may be reassessing both its potential and the risks, which can influence how the market is willing to value the stock.
• On our simple valuation checklist, Uber Technologies scores 6 out of 6 for being assessed as undervalued across the key checks, giving it a valuation score of 6, and next we will look at how different valuation methods line up on the stock before finishing with a way to go beyond the usual models.

Find out why Uber Technologies's -10.3% return over the last year is lagging behind its peers.

Approach 1: Uber Technologies Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes expected future cash flows and discounts them back to what they might be worth today. It is essentially asking what a stream of future cash in your pocket could be valued at right now.

For Uber Technologies, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections. The latest twelve month free cash flow is about $9.79b. Analyst estimates and subsequent extrapolations point to projected free cash flows such as $10.39b in 2026 and $17.67b in 2030, with later years extended using Simply Wall St assumptions out to 2035.

When all those projected cash flows are discounted back to today, the model arrives at an estimated intrinsic value of about $171.37 per share. Compared with the recent share price of $72.77, this implies the stock is about 57.5% undervalued on this DCF view.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Uber Technologies is undervalued by 57.5%. Track this in your watchlist or portfolio, or discover 54 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Uber Technologies.

Approach 2: Uber Technologies Price vs Earnings

For profitable companies, the P/E ratio is a useful way to look at value because it ties the share price directly to the earnings that belong to you as a shareholder. The higher the growth investors expect and the lower the perceived risk, the higher the P/E ratio they are usually willing to accept as “normal” for that company.

Uber Technologies is currently trading on a P/E of 14.90x. That sits below the Transportation industry average P/E of 37.19x and also below the peer group average of 29.62x. On the surface, that gap suggests the market is placing a lower valuation on each dollar of Uber’s earnings than on its typical peer.

Simply Wall St’s Fair Ratio for Uber is 22.84x. This is a proprietary estimate of what Uber’s P/E might be given its earnings growth profile, industry, profit margins, market value and key risks. Because it adjusts for these company specific factors, the Fair Ratio can be more informative than a simple comparison with broad industry or peer averages.

Putting that together, Uber’s current P/E of 14.90x sits below the Fair Ratio of 22.84x. This indicates that, on this earnings-based view, the shares may be trading at a lower valuation relative to that reference point.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Uber Technologies Narrative

Earlier we mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you attach a clear story about Uber Technologies to the numbers by linking your view of its future revenue, earnings and margins to a forecast and Fair Value, then comparing that Fair Value to the current price. Each Narrative lives on the Community page and updates automatically when new data such as earnings or news arrives. For example, one Uber Narrative currently anchors on a Fair Value of about US$72.92, while another uses US$137.49. This reflects how different investors, looking at the same company and the same current share price, can reach very different conclusions about whether it looks expensive or inexpensive based on their own assumptions.

Do you think there's more to the story for Uber Technologies? Head over to our Community to see what others are saying!

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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