Uber Technologies, Inc.

UBER Details

Uber Technologies, Inc. (NYSE: UBER) is a technology company that connects passengers to drivers, hungry individuals to restaurants and food delivery services, and shippers to carriers. The company's on-demand technology platform is used to develop new products and services, such as self-driving cars, drone delivery, and Uber Elevate.

Latest News:

• Collaboration With BP: On March 22, 2022, BP and UBER announced a new worldwide strategic convenience delivery agreement, expanding their existing local arrangements to serve more customers worldwide. The partners will offer a wide choice of high-quality convenience products from select retail locations, including fresh and prepared options. BP is the first convenience retailer to partner with Uber Eats globally to have over 3,000 retail locations available on the delivery platform within the next three years. The collaboration will help BP increase consumer access and expand its delivery footprint in response to the rising demand for food, groceries, and everyday goods delivered to the door.

FY21 Results:

• Surge in Revenues: UBER's revenue increased by 56.70% to USD 17.46 billion during FY21 (ended December 31, 2021), compared to USD 11.14 billion during FY20, attributable to YoY growth of 114.19% in Delivery revenue driven by COVID-19-related stay-at-home order demand, increased food delivery orders and larger basket sizes, and continuous expansion throughout US and international markets.
• Reduction-in Losses: During FY21, the company had witnessed a decline in net losses to USD 496 million vs. USD 6.77 billion during FY20.
• Leveraged Balance Sheet: As of December 30, 2021, the company had cash and cash equivalents of USD 4.30 billion and total debt of USD 9.28 billion.
• All-time High Gross Bookings: UBER reported a 56.17% growth in gross bookings to USD 90.42 billion in FY21 from USD 57.90 billion in FY20.

Key Risk:

• Geographic Concentration Risk: Only five metropolitan areas in the US, Brazil, and the UK accounted for 23% of UBER's gross mobility bookings in FY21: Chicago, Los Angeles, and New York City in the US, Sao Paulo in Brazil, and London in the UK. Because of their geographic concentration, economic, social, meteorological, and regulatory variables in these large metropolitan areas impact their operations and financial outcomes.

Outlook:

• Q1FY22 Guidance: As of FY21, UBER expects Gross Bookings of USD 25 – 26 billion, together with adjusted EBITDA of USD 100 – 130 million.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks. 

Stock Recommendation:

UBER's stock price has fallen 34.06% in the past nine months and is currently leaning towards the lower end of its 52-week range of USD 28.28 to USD 59.22. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 34.57.

Considering the correction in the stock price, recent collaborations, strong market presence, positive outlook, associated risks, and current valuation. We recommend a "Hold" rating on the stock at the current price of USD 31.305, down 1.20% as of April 22, 2022, at 10:12 AM PDT.

Three-Year Technical Price Chart (as on April 22, 2022, at 10:12 AM PDT). Source: REFINITIV, Analysis by Kalkine Group

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: All forecasted figures and industry information have been taken from REFINITIV.  

Note 3: The report publishing date is as per the Pacific Time Zone.

Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.

You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.

The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.

Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website unless those persons comply with certain safeguards, procedures, and disclosures.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.