They expect the company to post a final loss in 2023, before turning a profit of US$1.2b in 2024. The company is therefore projected to breakeven around 2 years from now.
In fact, by the first nine months of 2022, Uber posted a loss from operations of $1.69 billion on revenues for the same period of $23.27 billion. Thus, Uber is not profitable as of 2022.
Beyond Uber's commitment to be a net-zero platform by 2040, we've pledged to be net zero in a number of cities by 2030. That commitment translates into several specific offerings in our mobility and delivery lines of business.
Uber has a great well-run business and a future mega-cap. Uber's ecosystem is unparalleled, and Uber One is a game-changer. The unit economics are great, and profitability is around the corner. Most people can't picture their lives without Uber, and for a P/S ratio of ~5, it is an obvious buy.
Uber posts record revenue but loses nearly $2 billion on investments. Despite posting a loss, the company's quarterly results exceeded analyst expectations as more drivers returned to the road. As a subscriber, you have 10 gift articles to give each month.
In English, the money that Uber collects from fares isn't enough to pay for its revenue and operating costs; therefore, Uber loses money each quarter. How much money the company loses depends on how you count costs and if you take into account non-cash costs (such as stock compensation).
The fatal flaw was that Uber never achieved the dominance needed to exploit anti-competitive market power because the taxi industry never had the powerful scale/network economies needed to drive winner-take-all dominance.
Ride-sharing companies are likely going to be around in the next 10 years. However, this will require strategizing and being able to overcome the handles of operational costs, safety, and competition that they are likely to face along the way.
However, given the recovery of the mobility business, continued growth in the delivery segment, and opportunities in the freight business, Uber stock seems to be a great long-term opportunity at these discounted prices.
Despite losing some investor confidence amid continued Covid headwinds, Uber could be positioning itself for a comeback in 2022, analysts say.
Outlook for Q4 2022
Gross Bookings to grow 23% to 27% YoY on a constant currency basis, with an expected 7 percentage point YoY currency headwind, translating to a range of $30.0 billion to $31.0 billion. Adjusted EBITDA of $600 million to $630 million.
Now despite the strong growth, Uber stock trades at under 3x consensus 2022 revenues, well below delivery rival DoorDash stock, which trades at close to 6x projected 2022 revenue. Uber's overall growth is likely to come in at about 45% in 2022, with Uber Revenues likely to stand at about $24 billion, per our estimates.
Uber's Profitability
Uber has a gross profit margin of 35.7%, which changed some -7.3% from three years ago, indicating that the business is still struggling with the cost structure. These results may further shift in the future, if gas prices and other inflation impacted inputs keep rising.
Despite the growth and margin potential, Uber stock trades at under 2x consensus 2022 revenues, well below delivery rival DoorDash stock, which trades at almost 4x projected 2022 revenue. We value Uber stock at about $40 per share, marking a 40% premium over the current market price.
Uber Technologies, Inc.
may be overvalued. Its Value Score of D indicates it would be a bad pick for value investors. The financial health and growth prospects of UBER, demonstrate its potential to underperform the market. It currently has a Growth Score of A.
Uber Technologies has received a consensus rating of Buy. The company's average rating score is 2.96, and is based on 27 buy ratings, 1 hold rating, and no sell ratings.
That, combined with the use of electric vehicles and the inevitable reduction in the cost of electricity with the implementation of alternative energy sources, can lead Uber to that coveted $1 trillion valuation by 2030.
Stock Price Forecast
The 41 analysts offering 12-month price forecasts for Uber Technologies Inc have a median target of 43.00, with a high estimate of 75.00 and a low estimate of 15.00. The median estimate represents a +52.48% increase from the last price of 28.20.
Uber's top competitors include Blacklane, Getaround, and Vroom Delivery. Blacklane provides a chauffeur portal to connect people to professional chauffeurs via their mobile app, website, and hotline.
Despite the whizzy app, Uber couldn't compete with local taxi services and government regulations. Uber Japan started its ride-hailing service in 2014. It was initially expected to disrupt the Japanese taxi business. However, 8 years after its launch, Uber is available only in 15 cities in Japan.
Uber's failure, a global platform, might be attributed to the Chinese government's protectionism or its industrial policy on domestic corporate priority. However, when DiDi pushed out Uber, the Chinese government's hostile action against foreign companies was meager.
How Much Debt Does Uber Technologies Carry? The chart below, which you can click on for greater detail, shows that Uber Technologies had US$9.45b in debt in September 2022; about the same as the year before. On the flip side, it has US$4.87b in cash leading to net debt of about US$4.59b.
“That's genuinely all it was.” Uber lists community guidelines on its website, which specify that “you shouldn't touch or flirt with other people in the car,” and that there's “no sexual conduct with drivers or fellow riders, no matter what.”
The ridesharing giant has also struggled with labor shortages as riders have complained of rising prices, calling into question the durability of the app-based business model. According to data from S&P Global Market Intelligence, the stock fell 51% in the first half of 2022.