2. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 146
P/E Ratio: 111.64
Headquartered in San Francisco, California, Uber Technologies, Inc. (NYSE:UBER) operates technology platforms that connect consumers with independent ride service providers. The company extends its services to various forms of transportation, such as public transit, bikes, and scooters. Additionally, Uber provides on-demand food delivery, freight services, business fleet solutions, and same-day delivery options. With a presence in over 70 countries, Uber serves more than 142 million monthly active platform consumers.
On November 20, Uber Technologies Inc (NYSE:UBER) announced its intention to issue $1.2 billion in five-year convertible bonds, scheduled to mature in 2028 and targeted at qualified institutional buyers. The ride-sharing company specified that a portion of the funds would be allocated to cover expenses related to entering capped call transactions, with the goal of mitigating dilution during the conversion into equity. Uber further outlined that the remaining proceeds would be utilized for the repayment, redemption, or repurchase of outstanding debt, including $1 billion of 7.5% notes set to mature in 2025.
At the end of the third quarter of 2023, 146 hedge funds in the database of Insider Monkey held stakes worth $8.1 billion in Uber Technologies, Inc. (NYSE:UBER), up from 144 in the preceding quarter, with a total value of $7.66 billion.
Here is what RiverPark Advisors said about Uber Technologies, Inc. (NYSE:UBER) in its Q3 2023 investor letter:
“Uber Technologies, Inc. (NYSE:UBER): UBER was the top contributor in the quarter following a better-than-expected 2Q23 earnings report and 3Q23 guidance. Gross bookings of $33.6 billion were up 16% year over year. Mobility gross bookings of $17 billion grew 25% over last year driven by a combination of product innovation and driver availability. Delivery gross bookings of $16 billion were up 12% from last year. 2Q Adjusted EBITDA of $916 million, up $552 million year over year, significantly beat Street estimates of $845 million and the company generated $1.1 billion of free cash flow. Management guided to continuing growth in 3Q Gross Bookings (17%-20% growth) and Adjusted EBITDA (of $975-1,025 million).
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 just ride sharing and food delivery, but also as a global mobility platform with the ability to sell to its 130 million users (by comparison, Amazon Prime has 200 million members) and penetrate new markets of on-demand services, such as package and grocery delivery, travel, and worker staffing for shift work. Given its $4.3 billion of unrestricted cash and $4.4 billion of investments, the company’s enterprise value of $95 billion equates to just over 20x next year’s estimated free cash flow.”
