Uber Technologies, Inc. (NYSE:UBER) Has Found A Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Uber Technologies, Inc.'s (NYSE:UBER) future prospects. Uber Technologies, Inc. develops and operates proprietary technology applications in the United States, Canada, Latin America, Europe, the Middle East, Africa, and Asia excluding China and Southeast Asia. With the latest financial year loss of US$9.1b and a trailing-twelve-month loss of US$3.4b, the US$87b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Uber Technologies' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Uber Technologies

Consensus from 41 of the American Transportation analysts is that Uber Technologies is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$43m in 2023. Therefore, the company is expected to breakeven roughly 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 65%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Uber Technologies' growth isn’t the focus of this broad overview, however, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Uber Technologies currently has a debt-to-equity ratio of 109%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Uber Technologies, so if you are interested in understanding the company at a deeper level, take a look at Uber Technologies' company page on Simply Wall St. We've also put together a list of pertinent aspects you should further examine:

1. Valuation: What is Uber Technologies worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Uber Technologies is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Uber Technologies’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.