Should you buy Uber stock? (Feb 2023)
For more detailed analysis visit our website: https://www.overlookedalpha.com
Uber reported fourth quarter earnings last week and the stock jumped around 7%. Based on the latest share price the company now has a market cap of 71 billion dollars. With 4.2 billion of cash and 10 billion of debt the enterprise value is roughly 77 billion.
Revenue over the last 12 months was 31.9 billion, and the company reported 1.7 billion in adjusted ebitda and 390 million in free cash flow. However, net income was negative 9.1 billion which was impacted by a fall in Uber’s equity investments.
As a result, Uber is now valued at 2.4 times annual revenue, 45 times ebitda and almost 200 times free cash flow.
Uber’s financials are complicated by its investments in startups such as Didi,Grab, Joby, Lime and Aurora, as well as its many business segments. But these assets also give the company strong optionality.
Its mobility segment grew 31% last year and that growth is expected to continue into 2023.
Its delivery segment grew 6%, (with more than a 50% impact from currency headwinds) and its freight segment grew 42%.
Intertwined in all this Uber is making progress with advertising, subscriptions, its travel app and car sharing. As well, Uber is partnering with Hertz to help grow its fleet of electric vehicles and the company wants to be emission free in big cities by 2030.
All in all, Uber is growing fast and has numerous levers to pull. Its success is in stark contrast to the performance of rival Lyft whose stock collapsed more than 30%.
#stocks #investing #overlookedalpha #finance #uberstock
Uber reported fourth quarter earnings last week and the stock jumped around 7%. Based on the latest share price the company now has a market cap of 71 billion dollars. With 4.2 billion of cash and 10 billion of debt the enterprise value is roughly 77 billion.
Revenue over the last 12 months was 31.9 billion, and the company reported 1.7 billion in adjusted ebitda and 390 million in free cash flow. However, net income was negative 9.1 billion which was impacted by a fall in Uber’s equity investments.
As a result, Uber is now valued at 2.4 times annual revenue, 45 times ebitda and almost 200 times free cash flow.
Uber’s financials are complicated by its investments in startups such as Didi,Grab, Joby, Lime and Aurora, as well as its many business segments. But these assets also give the company strong optionality.
Its mobility segment grew 31% last year and that growth is expected to continue into 2023.
Its delivery segment grew 6%, (with more than a 50% impact from currency headwinds) and its freight segment grew 42%.
Intertwined in all this Uber is making progress with advertising, subscriptions, its travel app and car sharing. As well, Uber is partnering with Hertz to help grow its fleet of electric vehicles and the company wants to be emission free in big cities by 2030.
All in all, Uber is growing fast and has numerous levers to pull. Its success is in stark contrast to the performance of rival Lyft whose stock collapsed more than 30%.
#stocks #investing #overlookedalpha #finance #uberstock
Transcript
00:00 Should you buy Uber stock? Uber reported fourth quarter earnings last week and the stock jumped
00:05 around 7%. Based on the latest share price the company now has a market cap of $71 billion
00:11 with $4.2 billion of cash and $10 billion of debt. The enterprise value is roughly $77
00:17 billion. Revenue over the last 12 months was $31.9 billion and the company reported $1.7
00:23 billion in adjusted EBITDA and $390 million in free cash flow. However net income was
00:30 -$9.1 billion which was impacted by a fall in Uber's equity investments. So right now
00:35 Uber is valued at 2.4 times annual revenue, 45 times EBITDA and almost 200 times free
00:41 cash flow. Uber's financials are complicated by its investments in start-ups such as Didi,
00:47 Grab, Joby, Lime and Aurora as well as its many business segments. But these assets also
00:53 give the company strong optionality. Its mobility segment grew 31% last year and that growth
01:00 is expected to continue into 2023. Its delivery segment grew 6% though that would have been
01:06 higher if it wasn't for currency headwinds. And its freight segment grew 42%. Intertwined
01:12 in all this Uber is making progress with advertising, subscriptions, a travel app and car sharing.
01:19 As well Uber is partnering with Hertz to help grow its fleet of electric vehicles and the
01:24 company wants to be emission free in big cities by 2030. All in all Uber is growing fast and
01:31 has numerous levers to pull. Its success is in stark contrast to the performance of rival
01:36 Lyft whose stock collapsed more than 30%. The big problem however is that over 14 years
01:42 of operation Uber is still not returning anything to shareholders. The company is still not
01:48 profitable, the share price is underwater and shareholders continue to see dilution.
01:54 Stock based compensation is huge at $1.8 billion. But management did target $5 billion in earnings
02:00 by the end of 2024. A 25 times multiple on that figure gets us to a valuation of $125
02:07 billion which is over 60% upside from here. I don't think Uber will quite hit that target
02:13 and after a 40% return year to date I think the stock has room for a pull back. This is
02:18 certainly not a clean or risk less investment but even so Uber is in a very interesting
02:24 position for the future and I think the company is worth backing. That's why I give the stock
02:29 a bullish rating but these are my personal opinions not financial advice and I do own
02:33 shares in Uber. For more detailed investing ideas visit our website overlookedalpha.com