We came across a bullish thesis on Uber Technologies, Inc. (UBER) on Rijnberk InvestInsights’ Substack by Daan Rijnberk. In this article, we will summarize the bulls’ thesis on UBER. Uber Technologies, Inc. (UBER)’s share was trading at $61.23 as of Dec 18th. UBER’s trailing and forward P/E were 30.16 and 23.92 respectively according to Yahoo Finance.
A close up view of a hand holding a smartphone, using a ride sharing app.
Uber Technologies, Inc. represents a compelling investment opportunity amid recent market pessimism that has undervalued its significant growth potential and market dominance. As a global leader in ride-hailing and food delivery services, Uber has consistently outperformed expectations, achieving GAAP profitability and robust free cash flow (FCF) growth. The company continues to deliver impressive top-line growth in the high teens to low twenties, while adjusted EBITDA grows even faster at a high-30% to 40% clip. This exceptional performance is underpinned by Uber’s strong market share, innovative business model, and financial strength, which create formidable barriers to entry for competitors.
Uber dominates the global ride-hailing market with a 25% market share, significantly outpacing its nearest competitor, Lyft, at 8%. Its scale and financial resources allow it to offer competitive pricing and superior availability, making it the go-to platform for mobility services worldwide. In its mobility segment, Uber is projected to outpace the industry’s 13% CAGR through 2030, achieving mid-to-high teens growth as it continues to gain market share. Similarly, in the delivery segment, Uber holds the #1 position in seven of its top ten markets and consistently gains share despite facing competition from Doordash and other regional players. With the delivery industry expected to grow at a 9% CAGR, Uber’s ability to achieve double-digit growth underscores its leadership and competitive advantages.
Furthermore, Uber’s growth story is far from over. With relatively low penetration across its markets—just 5% of adults in its operating countries use its services—the company has substantial room for expansion. Even in mature markets like the U.S., mobility penetration is only 20%. Additional growth drivers include cross-platform opportunities, a burgeoning advertising business, and rising demand for its services globally. Management’s bullish medium-term outlook supports this trajectory, projecting steady revenue growth and continued margin expansion through 2026.
Despite these strengths, Uber’s share price has been weighed down by concerns about the emerging robotaxi industry and its potential impact. However, these fears appear overblown and premature, as Uber is well-positioned to integrate this technology as a beneficiary rather than a victim. This disconnect between the company’s operational performance and its market valuation presents a unique buying opportunity. At around $61 per share, Uber trades at a discounted EV/EBITDA multiple of 17x and a forward PEG ratio below 1x, signaling a bargain for a high-growth, dominant player in its industry. With its robust fundamentals and clear growth runway, Uber remains an excellent long-term investment, particularly at current levels below $65 per share.
Uber Technologies, Inc. (UBER) is on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 136 hedge fund portfolios held UBER at the end of the third quarter which was 145 in the previous quarter. While we acknowledge the risk and potential of UBER as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than UBER but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.