Nice work Jimmy. Do you still view it as a growth stock? International revenue growth has been slow and the competitive advantage of being first of its kind is getting diminished with higher wages, benefits and operating cost. The price to earnings multiple is also rather high. While I like the company, now is probably not a good time to buy.
I still view it as a growth stock with significant opportunities ahead, including higher penetration and market expansion, which support revenue growth. market is growing alongside it, creating a favorable backdrop. at 25x forward P/E, it seems undervalued given its strong cash generation, growth, and quality...
Thank you so much for your comment and subscription, Partha! I hope you enjoy the content. it's a pleasure to have you here!!!
Thanks a lot, Denis! It’s both Uber’s biggest strength and maybe its biggest challenge too, who knows… Autonomous driving is super promising, but it won’t be an easy road. That said, I agree—they’re doing really well even without it. Let’s see how it all unfolds!
Great article Jimmy, especially good thoughts on the business model and competitive advantages !
That being said, we would be more cautious on the assumption side. You assume pretty aggressive market share gain, substantially outpacing the market growth. Margin is also growing pretty fast, which could be problematic due to the competition (even if Uber has advantages). Although your scenario is possible we think it’s better to assume greater margin of safety.
However, even at market growth and lower margin, Uber is a fairly good investment. Especially if you consider the exit multiple of 12x. We believe Uber could get to 13-14x multiple… so that could partially or fully offset lower assumptions on the EBITDA projection side.
Thank you so much for your contribution, Alpha! Discussions with you are always insightful.
On market share, I see your point, but I still believe Uber has room to grow to ~30% in ride-hailing. It can deepen its presence in established markets by gaining ground over competitors with its self-reinforcing flywheel—anchoring more users, drivers, and offering the lowest possible prices as a result. At the same time, it can expand into less developed regions, where its scalable and adaptable platform allows it to address unique local needs and quickly establish dominance.
As for margins, you’re right to urge caution. That said, I think Uber’s operational efficiency, combined with the growth of high-margin revenue streams like ads, makes margin expansion very likely. Ads, in particular, require minimal investment and could significantly improve profitability over time.
Valuation is always about estimating trends, not absolutes. Sensitivity analysis helps bridge that uncertainty. Thanks again for pushing the conversation forward—your perspective is always invaluable!
Nice work Jimmy. Do you still view it as a growth stock? International revenue growth has been slow and the competitive advantage of being first of its kind is getting diminished with higher wages, benefits and operating cost. The price to earnings multiple is also rather high. While I like the company, now is probably not a good time to buy.
I still view it as a growth stock with significant opportunities ahead, including higher penetration and market expansion, which support revenue growth. market is growing alongside it, creating a favorable backdrop. at 25x forward P/E, it seems undervalued given its strong cash generation, growth, and quality...
Thank you so much for your comment and subscription, Partha! I hope you enjoy the content. it's a pleasure to have you here!!!
Great post. Uber's main strength will be in autonomous driving. But even without it the company is doing well.
Thanks a lot, Denis! It’s both Uber’s biggest strength and maybe its biggest challenge too, who knows… Autonomous driving is super promising, but it won’t be an easy road. That said, I agree—they’re doing really well even without it. Let’s see how it all unfolds!
Great article Jimmy, especially good thoughts on the business model and competitive advantages !
That being said, we would be more cautious on the assumption side. You assume pretty aggressive market share gain, substantially outpacing the market growth. Margin is also growing pretty fast, which could be problematic due to the competition (even if Uber has advantages). Although your scenario is possible we think it’s better to assume greater margin of safety.
However, even at market growth and lower margin, Uber is a fairly good investment. Especially if you consider the exit multiple of 12x. We believe Uber could get to 13-14x multiple… so that could partially or fully offset lower assumptions on the EBITDA projection side.
Thank you so much for your contribution, Alpha! Discussions with you are always insightful.
On market share, I see your point, but I still believe Uber has room to grow to ~30% in ride-hailing. It can deepen its presence in established markets by gaining ground over competitors with its self-reinforcing flywheel—anchoring more users, drivers, and offering the lowest possible prices as a result. At the same time, it can expand into less developed regions, where its scalable and adaptable platform allows it to address unique local needs and quickly establish dominance.
As for margins, you’re right to urge caution. That said, I think Uber’s operational efficiency, combined with the growth of high-margin revenue streams like ads, makes margin expansion very likely. Ads, in particular, require minimal investment and could significantly improve profitability over time.
Valuation is always about estimating trends, not absolutes. Sensitivity analysis helps bridge that uncertainty. Thanks again for pushing the conversation forward—your perspective is always invaluable!
Thanks for sharing this deep dive, Jimmy! Uber is definitely catching my attention.
Thank you so much for your contribution, Lara!