At the end of last week, Uber Technologies published its 3Q financials. The company increased its net loss, but increased revenue amid easing restrictions related to the COVID-19 pandemic, and most importantly, generated positive EBITDA. Uber’s quarterly revenue rose 72.6% to $ 4.85 billion from $ 2.81 billion a year earlier, significantly better than market expectations of $ 4.42 billion. The number of Uber platform users (account activity at least once a month, MAPC ) in the last quarter increased by 40%, to 109 million. The total volume of orders of the company increased by 57%, to a record $ 23.1 billion (consensus forecast – $ 23.3 billion).
TIKR:
UBER
PRICE:
$47
TARGET PRICE:
$82
UPSIDE:
75%
Net loss in July-September was $ 2.42 billion, or $ 1.28 per share, compared with a loss of $ 1.09 billion, or $ 0.62 per share, in the same period last year. At the same time, a loss of $ 2 billion was associated with one-time write-offs due to losses from investments in the Chinese taxi operator Didi Global Inc. Meanwhile, the company posted positive EBITDA of $ 8 million for the first time, compared with a loss of $ 625 million in the same period a year earlier. The market on average expected negative EBITDA at minus $ 38 million. According to Uber’s forecast, in the current quarter, adjusted EBITDA will be $ 25-75 million, while the market expects a figure of $ 104 million.
We maintain our valuation for Uber Technologies at $ 82. Our assessment is based on a differentiated approach, thanks to the company’s global scale and market leadership in various transport and logistics segments, coordinated through applications. Based on our analysis, Ridesharing’s core platform is profitable for every trip and the company is poised to further expand its share in several high-growth regions, which we believe provides significant opportunities for continued revenue growth. We believe that new businesses such as ride sharing, new urban products (such as bicycles and scooters), food delivery will soon start generating profits. Uber’s business model perfectly correlates with global trends, given the significant scale of the company’s business and the effectiveness of quality control through in-platform cross-selling.
Uber is a platform company that facilitates transportation as a service (TaaS) through ride-hailing, bikes and scooters, food delivery, and freight booking services across their app network. They are active in over 10,000 cities and 69 countries globally as of Dec. 31, 2018, and it is a market leader with 65%+ market share in nearly all ride-sharing regions in which it operates. The company is investing in all of their business verticals and also autonomous driving technology through their Advanced Technologies Group which has partnerships with Toyota, Denso, and Softbank.