Uber Valuation

Industry:Technology/Transportation

Year Established:2009

Market:Operates in over 70 countries and 10,000+ cities worldwide.

Business Model: Connects riders and drivers via its app(largest growth), food delivery (Uber Eats) and logistics (Uber Freight)(declines a little). Takes a commission on transactions (usually 20–30%).

IPO: Went public in May 2019.

Recent Strategy Shifts: Focus on profitability after years of losses, Upfront pricing model boosted margins.

Heavy investment in autonomous vehicle partnerships nowadays, which was one of the main reasons(autonomous driving technology) for undervaluation of the company.

Controversies & Challenges:

Faced lawsuits and regulatory battles over driver classification.

Needs to provide more incentives to keep drivers.

Criticism over surge pricing, safety incidents, and early aggressive corporate culture.

Current CEO is Dara Khosrowshahi (since 2017), who replaced co-founder Travis Kalanick after governance concerns.

Market Position: One of the largest mobility platforms globally, alongside rivals like Lyft (US), Bolt (Europe), and Grab (Asia).

General Notes:

Comps analysis was difficult due to the characteristics of the industry and the comparable companies. There were many outliers and negative ratios resulting from losses, so I did not place much weight on it, even though it indicated a potential upside for the stock. The results were also upward-biased due to the overstatement of net income in the last two years.

I concluded UBER is overvalued, due to the constraints it might face in future. The Company’s last 2 year net income is overstated due to decreased valuation allowances for Deferred Tax Assets.

DCF & COMPS ANALYSIS Scenerios & Stock Intrinsic Values:

DCF Worst Scenerio: $44,90 COMPS Worst Scenerio: $75,90

DCF Base Scenerio: $69,80 COMPS Base Scenerio: $85,55

DCF Best Scenerio: $97,10 COMPS Best Scenerio: $169,76

The valuation is attached in an Excel file.