5. Uber Technologies, Inc. (NYSE:UBER)
10-Year Revenue Growth: 26.31%
Number of Hedge Fund Holders: 136
Uber Technologies, Inc. (NYSE:UBER) is a technology company that operates a Software-as-a-Service (SaaS) platform that primarily connects riders with drivers along with food deliveries, public transport integration, and grocery shopping. It operates in more than 70 countries around the world and is one of the best stocks to buy for high returns in 2025.
The company performed well during the fiscal third quarter of 2024, it not only delivered an all-time high GAAP operating profit of over $1 billion but also improved its gross bookings by 20% year-over-year. As of the third quarter, Uber Technologies, Inc. (NYSE:UBER) had over 161 monthly subscribers with an increased trip frequency.
There have been some concerns regarding the company due to the rise of autonomous driving vehicles. However, Eric Sheridan, an analyst at Goldman Sachs placed the stock as one of the top picks for 2025. He noted that the risk-to-reward situation for the company remains balanced. He argued that the concern regarding autonomous vehicles is short-term term and he is focused on the long-term prospects of the company. Moreover, the management of Uber Technologies, Inc. (NYSE:UBER) is collaborating with 14 partners including NVIDIA to develop its autonomous vehicle technology faster. Here’s what RiverPark Large Growth Fund stated regarding Uber Technologies, Inc. (NYSE:UBER) in its first quarter 2024 investor letter:
“Uber Technologies, Inc. (NYSE:UBER): UBER was a top contributor in the quarter following better than expected 4Q23 earnings and 1Q24 guidance. Gross bookings of $37.6 billion were up 22% year over year. Mobility gross bookings of $19.3 billion grew 29% over last year driven by a combination of product innovation and driver availability. Delivery gross bookings of $17 billion were up 19% from last year and continued to be strong throughout the quarter. 4Q Adjusted EBITDA of $1.3 billion, up $618 million year over year, was better than management’s guidance of $1.2 billion, and the company generated $768 million of free cash flow, up from a cash loss of $303 million last year. Management guided to continuing growth in 1Q Gross Bookings (20% growth) and Adjusted EBITDA (of $1.3 billion). The company hosted a well-received analyst day in February during which it guided to three year compounded annual growth rates for gross bookings of mid-to-high single digits and EBITDA of 30-40%, both above investor expectations. The company also guided to free cash flow conversion of 90% of EBITDA.
UBER remains the undisputed global leader in ride sharing, with a greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates. Moreover, after a history of losses, the company is now profitable, delivering expanding margins and substantial free cash flow. We view UBER as more than a ride sharing and food delivery service; we also see it as a global mobility platform with 142 million users (by comparison, Amazon Prime has 200 million members) and the ability to penetrate new markets of on-demand services, such as package and grocery delivery, travel, and hourly worker staffing. Given its $5.4 billion of unrestricted cash and $4.8 billion of investments, the company today has an enterprise value of $165 billion, indicating that UBER trades at 21x our estimates of next year’s free cash flow.”
