Uber Shares Sink on Outlook. Is It Time to Buy the Stock on the Dip?

Core Insights - Uber's Q4 revenue increased by 20% year over year to $12.0 billion, surpassing analyst expectations of$11.8 billion [2] - Mobility revenue rose 25% to $6.9 billion, while delivery revenue increased by 21$3.8 billion [2] - Gross bookings grew 18% to $44.2 billion, with equal contributions from mobility and delivery segments [3] Financial Performance - Adjusted EBITDA climbed 44$1.8 billion [3] - Q1 gross bookings are projected to be between $42.0 billion and$43.5 billion, slightly below analyst expectations [4] - Adjusted EBITDA for Q1 is expected to be between $1.79 billion and$1.89 billion, indicating a growth of 30% to 37% [4] Future Outlook - The company anticipates mid-teens to high-teens gross booking growth over the next three years, with profitability growth of 30% to 40% [5] - Uber is facing pressure from rising insurance costs and is implementing safety technologies to mitigate these expenses [5] - The partnership with Waymo aims to introduce driverless ride-share vehicles in Austin and Atlanta, although commercialization is expected to take time due to high hardware costs [6][11] Autonomous Driving Potential - Uber estimates that autonomous driving could serve 10% to 15% of the market in the next five years, representing a $1 trillion opportunity in the U.S. [7] - Five key factors need to be addressed for this technology to succeed, including regulations, safety perceptions, hardware costs, operational infrastructure, and demand management [8] Competitive Landscape - Investors are uncertain about Uber's position in the shift towards autonomous driving, especially with competitors like Waymo and Tesla advancing in the space [9] - Uber is positioning itself as a ground operation to manage daily needs of a mixed fleet of human and autonomous drivers [10] - The current valuation shows a forward price-to-earnings ratio of 20 times based on 2025 estimates, suggesting the stock may be undervalued [12][13]