9. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 130
Uber Technologies, Inc. (NYSE:UBER) made it to Peconic Hedge Fund’s top 10 stock picks. Uber Technologies, Inc. (NYSE:UBER) is a major force in ride-sharing and has a strong presence worldwide. In addition to ride-sharing, Uber Technologies, Inc. (NYSE:UBER) makes money from other services like Uber Eats (food delivery) and freight. Both Uber Eats and Uber Freight are growing quickly due to rising demand for delivery and logistics.
According to regulatory filings, at the end of the first quarter of 2024, Peconic Partners held 10,330 shares of Uber Technologies, Inc. (NYSE:UBER), valued at $795,307 and accounting for 0.03% of their portfolio. Analyst Johannes Kirchmayr expects a return of over 10% over a 5-year holding period for investors who keep holding Uber Technologies, Inc. (NYSE:UBER) at the current market price, assuming the EV/Sales ratio remains constant. Due to the current downward trend of Uber Technologies, Inc. (NYSE:UBER), the analyst recommends waiting for a trend reversal before buying. Uber Technologies, Inc. (NYSE:UBER)’s valuation is slightly higher than industry peers, with a median EV/Sales TTM multiple of 3.2x compared to Uber’s 3.6x.
RiverPark Large Growth Fund stated the following 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.”
