|Shares Out. (in M):||1,872||P/E||0||0|
|Market Cap (in $M):||94,000||P/FCF||0||0|
|Net Debt (in $M):||3,900||EBIT||0||0|
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Thesis: UBER is a reopening play that has been made even stronger by COVID, as the pandemic accelerated growth of their Food delivery business (Uber Eats) and forced Mgmt to shed unprofitable business/ventures. As a result, the company is nearly breakeven on an EBITDA basis and will soon see an inflection upward as the Rides business continues to recover and Eats stays. Uber shares should outperform as this inflection becomes fully apparent.
Further the recent IPO announcement by Didi and pending SPAC merger for Grab should also provide some uplift in valuation for Uber’s stakes in both companies.
Despite the Nasdaq 100 being near record levels, UBER shares are now -2% YTD and ~20% off their Feb highs. Meanwhile a SOTP based on conservative assumptions (both core segments trading in-line w/Peers and investments at BS values) implies upside of ~25%, while a more realistic set of assumptions (slight premium to peers and stakes in Didi/Grab at closer to market value) implies upside of ~55%.
Shares could re-rate even higher if investors start to give the company credit for its huge platform and superior marketshare.
Company Overview & Recent History –
UBER was previously written up by another member, and you can refer to that write-up for additional background
 Postmates was acquired for $2.65b in an all stock transaction, Drizzly was acquired for $1.1b (~90% cash/10% stock)
 Uber owns ~35% of Russia’s Yandex Taxi, ~16% of SE Asia’s Grab, 10% of India’s Zomato, 32% of Lime and ~15% of China’s DiDi)
- Uber reaches positive Adj EBITDA in Q4 as driver shortages and Covid headwinds dissipate
o Delivery continues momentum and while Rides segment sees faster recovery
- Uber’s other stakes receive more credit from investors as recent deals to go public close
o Didi IPO is successful
o GRAB Merger with Altimeter Growth SPAC closes in Q4
- Regulatory issues are settled favorably
o Driver Classification issue with DOL is an overhang
- Divestiture of Freight Brokerage
o Likely margin accretive and would further simplify Uber with just 2 core segments remaining (Rides & Eats)
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