Uber's market leadership and decent valuation are positives. At $60 is a good bargain. It can easily return 15-16% a year.
I've always liked Uber but never got an opportune price to buy it. Given the fall from its 52 week high of $102, I believe that an entry price for $60 is worth buying at. Uber has been quite the under performer losing 12% in the past year, and gaining just 15% in the past 5, so entry price is crucial. DoorDash (DASH) reports tomorrow and we’ll get a good idea of how its biggest competitor is performing. Here's my take on DASH, which I've been buying for the past month.
If there's nothing untoward/dilutive from the mixed shelf offering for Uber, yes it would be worth buying at $60.
Market leadership by far in mobility (ride-share) and a strong second in food delivery,
Autonomy - Its strong network gives it a lot of opportunities via partnerships, which it is pursuing the world over with Waymo, WeRide, Lucid and AVRide, so I’m confident that it will get a foothold in the robo-taxi and robot food delivery market as well.
The hybrid delivery model should also lead to improved margins.
Ad revenue, while small $2Bn (4% of total revenue) is growing at 50%.
Valuation is good at 21x adjusted earnings per share, dropping 29% this year but growing 28 and 29% in the next two years. Sales are growing in the mid-teens at just 2x sales. The company performs a lot better on a cash flow basis, with 20% operating cash margin - SBC takes up about $2Bn annually.
There are a lot of opportunities in delivery and freight, and Uber has massive brand recognition all over the world.
A mixed shelf offering was announced hinting at possible dilution but no other details were given, we’ll see if that affects Uber.
Over 70% of the grocery delivery market is dominated by retail giants like Amazon and Walmart so that market is going to be difficult to penetrate.
The markets have also not been rewarding adjusted earnings, I believe that a drop in 2026 earnings will keep a lid on the price till we see improvements, though 2027-2028 should be exceptionally good with 27% growth.
Given the skittishness in the markets regarding all things software, I suspect there will be a lot of selling on most up-moves, thus waiting for $60 is a good idea.
Nebius' masterly execution as an integrated neocloud player allows it to borrow at very cheap interest rates with very little shareholder dilution.
Nebius is executing brilliantly as an integrated neocloud player with tremendous reach, value addition and strong pricing power.
