Uber Technologies (UBER): Evaluating Valuation After Nationwide ALDI Partnership and Raised Grocery Delivery Forecast

There are times when an announcement changes how investors look at a company, and this week’s news from Uber Technologies (UBER) could be just that. Uber’s new partnership with ALDI pushes its Uber Eats platform well beyond restaurant meals. The deal brings ALDI groceries, including organic staples and household essentials, to consumers in more than 2,500 locations nationwide. Notably, ALDI is also the first retailer to accept SNAP-EBT payments on the app nationwide. For those weighing what to do with Uber stock, the move signals a big leap into the mainstream grocery space and access to a wider pool of customers.

On the back of this announcement, Uber also lifted its forecast for non-restaurant deliveries, now targeting a $12.5 billion annual run rate in gross bookings by year-end. This reflects a marked acceleration in the delivery segment. Over the last year, Uber shares have surged about 30%, and momentum has only picked up steam in recent months. Beyond grocery, Uber continues to layer in new retail partners and features as it works to turn Uber Eats into a one-stop shop for everything from shoes to fresh produce. All of these developments are helping feed strong growth outside its core ride-hailing business.

So after this year’s rally and the latest expansion, is Uber stock still undervalued or are these growth drivers already priced in by a confident market?

Most Popular Narrative: 31% Overvalued

The current popular narrative suggests that Uber Technologies is trading at a substantial premium to its intrinsic value, calling into question whether recent growth justifies its lofty share price.

"Future Earnings/P-E Projection (growth stock)
• 2030 Revenue Projection: $65-70B
• 2030 EBITDA: $14-15B (22% margin with autonomous vehicle benefits)
• Fair Value Range: $90-135B market cap
• Current Market Cap: $192B (significantly overvalued)
• Target Entry Price: $65-75 per share (vs current ~$95)"

Think Uber’s premium price is all about hype? Consider the aggressive growth forecasts supporting this fair value. The narrative includes ambitious long-term revenue and margin expansion, along with a major future technology play. Which pivotal financial assumptions are shaping this outlook? Keep reading to discover the foundation behind this controversial premium.

Result: Fair Value of $75 (OVERVALUED)

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

However, strong free cash flow generation or a profitable move into new verticals could quickly shift perceptions about Uber’s underlying value.

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

Another View: Discounted Cash Flow Tells a Different Story

While the market sees Uber as expensive based on future earnings projections, our DCF model draws a very different conclusion and suggests the company is fundamentally undervalued. Could the truth really be hiding in plain sight?

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

Stay updated when valuation signals shift by adding Uber Technologies to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Uber Technologies Narrative

If you see Uber’s story differently or want to shape your own take from the numbers, you can easily craft a narrative in just a few minutes. Do it your way.

A great starting point for your Uber Technologies research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.

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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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