What Every Investor Must Know About UBER Stock

We've been asking ourselves recently if the market has placed a fair valuation on Uber Technologies. Let's dive into some of the fundamental values of this large-cap Technology company to determine if there might be an opportunity here for value-minded investors.

The Market May Be Overvaluing Uber Technologies's Earnings and Assets:

Uber Technologies, Inc. develops and operates proprietary technology applications in the United States, Canada, Latin America, Europe, the Middle East, Africa, and Asia excluding China and Southeast Asia. The company belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 27.16 and an average price to book (P/B) ratio of 6.23. In contrast, Uber Technologies has a trailing 12 month P/E ratio of -27.3 and a P/B ratio of 10.8.

Uber Technologies's PEG ratio is 8.26, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

The Business Has Negative Margins on Average:

2020-03-02 2021-03-01 2022-02-24 2023-02-21
Revenue (MM) $13,000 $11,139 $17,455 $31,877
Gross Margins 53.4% 53.7% 46.4% 38.3%
Operating Margins -66.1% -43.7% -22.0% -5.8%
Net Margins -65.43% -60.76% -2.84% -28.68%
Net Income (MM) -$8,506 -$6,768 -$496 -$9,141
Net Interest Expense (MM) -$559 -$458 -$483 -$565
Depreciation & Amort. (MM) -$472 -$575 -$902 -$947
Earnings Per Share -$6.81 -$3.86 -$0.26 -$1.68
EPS Growth n/a 43.32% 93.26% -546.15%
Diluted Shares (MM) 1,248 1,753 1,899 2,039
Free Cash Flow (MM) -$3,733 -$2,129 -$147 $894
Capital Expenditures (MM) -$588 -$616 -$298 -$252
Net Current Assets (MM) -$2,653 -$9,616 -$11,727 -$12,567
Current Ratio 2.47 1.44 1.3 1.25
Long Term Debt (MM) $8,004 $9,783 $11,822 $12,293
LT Debt to Equity 0.53 0.71 0.77 1.45

Uber Technologies has a pattern of improving cash flows, growing revenues and decreasing reinvestment in the business, and a strong EPS growth trend. However, the firm suffers from slimmer gross margins than its peers and consistently negative margins with a positive growth rate. Finally, we note that Uber Technologies has just enough current assets to cover current liabilities and an average amount of debt.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.