Uber has been competing in the private markets and was facing heavy competition mainly because VCs were funding ride sharing startups so heavily. They’ve all died out leaving a duopoly between Uber and Lyft (in the US). They’re both public now and heavily incentivized to become profitable.
The media is attacking them for losing money but this is probably the best time to buy, right?
They’re grossing $50B in bookings with a 45% growth rate. In 2-3 years I can see them hitting $100B gross bookings even if growth slows due to moving towards profitability. At that point the stock price should have doubled.
Let’s leave autonomous and waymo out of the convo for now, and assume it won’t be productionized for a decade.
What do you think?
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That’s a *big* assumption. I’m not really going to give an opinion as to whether or not SDC are going to change that marker within a decade, but you better be damn well sure you’re right on that assumption before placing that bet. Read up. Research. Make sure you’re educated. The fact that Uber is so heavily investing in ATG should give you a hint as to how they feel about this matter, fwiw.
Bookings are not the best indicator of success IMO. It’s profit and they’re burning money right now.
That’s not to say they don’t have upside potential. But I think you should reevaluate some of your thinking and reapproach.
1. Battery life. See the odometer on your next Uber ride. They rack up miles insanely fast, a Tesla won’t be able to hold a charge long enough.
2. Logistics of recharging or replacing batteries. Getting a car to that spot and physically plugging it in or replacing the battery will be too expensive to scale. If they plug in, that’s 4 hours of inactivity, and can these batteries even last long if they’re being charged and depleted that often? So now we add the cost of new batteries a lot more often...
3. They can’t even scale to meet purchasing demand, how can they possibly build enough cars to have any significant competitive fleet?
4. Tesla owners won’t want their car going out at night just so some drunk can puke in it. It happens a lot.... just the thought of it is prohibitive.
5. Elon Musk just says stuff to distract investors from their missed goals. He’s full of it....
Tesla isn’t the real threat. The only real one is waymo and I don’t think they’re even close. Cruise and the rest of them are crap... they’ve got nothing. Trust me it won’t be Government Motors (GM) that will lead the way into the self driving future.
Simple extrapolations of growth are priced in, and if at that point growth expectations beyond then are lowered, or earnings are worse than we now expected to be then, etc, it would be worth less.
Eventually at some point in the future EPS needs to be able to be competitive with other equities, so if revenue doubled but earnings were projected to stall indefinitely, even if it was at a profit, price would be through the floor, maybe lower than now.
That's just a rant about how equity prices are more complicated than that though, no idea if it's a good idea to buy uber.