Another look at Uber Technologies' stock; I'm back in New York City; Pictures and videos from Nairobi Giraffe Manor and National Park
Uber Technologies (UBER) is back on my radar screen...
As longtime readers will recall, I took a "first look" at the ride-hailing and food-delivery giant in my April 10 e-mail last year.
At the time, I was impressed with Uber's growth in revenue, operating income, and free cash flow ("FCF"). But I concluded that its forward price-to-earnings (P/E) multiple of about 30 times was "too high a price for me." I also warned about "the threat from Waymo and other self-driving vehicle services."
It was a good call...
Uber has risen by only 6% since then, while the S&P 500 Index has jumped 31% over the same period:
However, the stock hit my radar screen again a month ago when private stock and real estate investor David Leiter pitched it at the ValueX conference in Switzerland.
David kindly gave me permission to share his full presentation with readers, so I'll do so today. Afterward, I'll also share my thoughts on the stock right now...
In his presentation, David starts by highlighting Uber's strong, diverse, market-leading business. Here's the first slide:
Next, he shows Uber's strong growth in revenue and FCF in this slide:
To see this visually, I updated the below charts that I included in my April 2025 e-mail...
First up is Uber's revenue and operating income through last year:
And here's historical operating cash flow, capital expenditures ("capex"), and FCF through 2025:
These are indeed extraordinary numbers.
Coming back to David's presentation, he then acknowledges four risks in this next slide:
Lastly, David concludes with his base-, bear-, and bull-case scenarios for the stock over the next five years (gains of 59.90%, 6.18%, and 97.38%, respectively, from when he gave his presentation).
He also notes that Pershing Square's Bill Ackman – my old college buddy – thinks it's a "double or triple" in a few years.
Here's the full slide:
I like this stock idea... and I think David (and Bill) are likely to be proved right.
Uber continues to grow rapidly. And the company's operating income and FCF are exploding upward.
However, the forward P/E multiple on the stock is now only about 22 times – down from 30 times about a year ago.
As regular readers know, I like buying the stocks of far-above-average companies when they're trading for market-average multiples.
As for one of the big overhangs on the stock – that Tesla's (TSLA) robotaxi service will expand rapidly and take share from Uber – I have the opposite point of view...
For reasons I outlined in detail in my December 11 and December 17 e-mails, I think Tesla's long-promised robotaxis are years away from prime time. And when investors realize this, Uber's stock will be a major beneficiary.
Thanks for sharing your slides, David!
By the way, his new book – Stop Making Stupid Investments – will be released on July 14. Here's a picture of the cover:
I look forward to giving it a read when it's out!
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.
P.P.S. I landed at JFK this morning after a seven-hour flight from Cape Town, South Africa to Nairobi, Kenya... followed by a 15-hour flight here. Phew!
I usually try to keep my trips when I'm not with my wife Susan to a week or less. But this one was 28 days. On the subway ride back home, I was hoping she hadn't locked me out!
This reminds me of two of my funniest lines (at least I think so):
- "The more I'm away, the stronger our marriage gets!"
- "If you ever find me murdered, tell the detectives not to bother conducting an investigation. Just go arrest Susan, because I will have pushed her buttons one too many times!"
I love you, Susan!
And as an update on part of my trip...
A week ago, my parents and I took our guest – my buddy David Berman – to the Nairobi Giraffe Manor, where we fed the giraffe.
Then, David and I went on a game drive at the Nairobi National Park – the only protected wildlife area in the world located within a capital city. Established in 1946 as Kenya's first national park, it encompasses 45 square miles and is situated just 4 miles from the city center.
We weren't expecting much, as David and I have been on plenty of safaris in our lives in some of the greatest parks in the world – Masai Mara, Kruger, Okavango, etc.
But we were blown away by this one...
It was one of my top five ever. We drove within a few feet of two rhinos with babies, a hyena, Cape buffalo, crocodiles, giraffes, birds, etc. Here are some pictures:
And here are videos I took with my Meta Ray-Ban glasses: