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Uber Technologies Inc UBER

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Morningstar’s Analysis

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Uber’s Latest Outlook Indicates Further Progress Toward Profitability; Shares Remain Attractive

Ali Mogharabi Senior Equity Analyst

Analyst Note

| Ali Mogharabi |

We are maintaining our $69 fair value estimate for narrow-moat and 4-star rated Uber. The firm filed an 8-K with the SEC on the morning of Sept. 21 in advance of a presentation at an investor conference later that day, providing an updated outlook for the second half of the year. The firm stated that it generated positive adjusted EBITDA in July and August. In addition, Uber slightly increased its third-quarter adjusted EBITDA guidance and is now more confident that it will generate positive adjusted EBITDA in the fourth quarter. We are not making any changes to our projections. In our view, the better outlook provided by the firm is a result of Uber's network effect moat source remaining intact, which we think has allowed the firm to lower driver acquisition spending even as driver supply has continued to increase. The integration of Uber’s mobility and delivery platforms will continue to ease cross-selling to not only consumers but also drivers, thereby lowering acquisition costs for both, which should result in higher take rate and further margin improvement.

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Company Profile

Business Description

Uber Technologies is a technology provider that matches riders with drivers, hungry people with restaurants and food delivery service providers, and shippers with carriers. The firm's on-demand technology platform could eventually be used for additional products and services, such as autonomous vehicles, delivery via drones, and Uber Elevate, which, as the firm refers to it, provides "aerial ride-sharing." Uber Technologies is headquartered in San Francisco and operates in over 63 countries with over 110 million users that order rides or foods at least once a month. Approximately 76% of its gross revenue comes from ride-sharing and 22% from food delivery.

1515 3rd Street
San Francisco, CA, 94158
T +1 415 612-8582
Sector Technology
Industry Software - Application
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Speculative Growth
Employees 23,700