1. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 145
Uber Technologies, Inc. (NYSE:NYSE) is a global leader in ride-hailing, food delivery, and freight services, revolutionizing urban transportation by connecting passengers with drivers via its mobile app since its inception. In Q2 2024, the global tech company saw a 21% year-over-year growth in gross bookings, alongside a 14% increase in its user base.
Uber Technologies, Inc. (NYSE:NYSE) recently announced a partnership with autonomous technology startup Avride to expand its self-driving capabilities. Uber Eats will begin using Avride’s sidewalk robots for deliveries in Austin, with plans to extend the service to Dallas and Jersey City. Additionally, Uber plans to introduce robotaxi rides in Dallas next year.
Additionally, TD Cowen reiterated its Buy rating on UBER with a $90 price target, emphasizing the importance of autonomous vehicles (AVs) to Uber’s future scalability. The firm’s analysis suggests that the deployment of cost-effective AVs will be crucial for Uber Technologies, Inc. (NYSE:NYSE) to expand its technology efficiently.
In Q2, 145 hedge funds held stakes in Uber Technologies, Inc. (NYSE:NYSE), with a combined value of $8.7 billion. Altimeter Capital Management is the largest shareholder, owning 13.515 million shares as of June 30.
RiverPark Advisors 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.”
While we recognize the potential of UBER as an investment, we believe certain deeply undervalued AI stocks offer greater prospects for higher returns in a shorter period. If you’re seeking an AI stock with even more promise than those on our list and trading at less than 5 times its earnings, check out our report about the cheapest AI stock.
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