Where Will Uber Stock Be in 5 Years?

Core Viewpoint - Uber has shown significant growth over the past five years, with a 251% increase in stock value, but has faced volatility and challenges, particularly during the COVID-19 pandemic [1] Group 1: Business Recovery and Growth - The COVID-19 pandemic negatively impacted Uber's trip count, gross bookings, and revenue in 2020, with declines in double digits compared to 2019 [1] - Despite the pandemic, Uber's delivery segment thrived as consumers turned to food delivery services, leading to higher gross bookings in this division compared to mobility in the last three quarters of 2020 [2] - By the end of 2024, Uber reported $163 billion in gross bookings and$44 billion in revenue, significantly higher than four years prior, with 171 million monthly active platform consumers, up from 93 million at the end of 2020 [3] Group 2: Profitability and Future Expectations - Uber transitioned from a $4.9 billion operating loss in 2020 to a$2.8 billion operating income in 2024, indicating strong profitability [4] - For the first quarter of 2025, management anticipates a 17% year-over-year increase in gross bookings, with a full-year expectation of 15% growth [5] Group 3: Competitive Position and Technology - The potential threat of autonomous driving technology poses a question for investors, as it could lower costs for riders and increase competition from new ride-hailing services [6] - Uber's strong consumer relationships and ability to aggregate demand and supply provide a competitive advantage, making it difficult for new entrants to challenge its brand and network effect [7] - Uber is likely to remain a key partner for companies developing self-driving technology, already collaborating with Alphabet's Waymo and Nvidia [8] Group 4: Investment Considerations - Uber's stock is currently trading at a forward P/E ratio of 15.8, which is lower than the Nasdaq 100's 24.5, suggesting it may be undervalued [9] - Billionaire hedge fund manager Bill Ackman has invested in Uber, projecting earnings growth of over 30% per year in the coming years, which could boost investor confidence [10] - Overall, Uber appears well-positioned to outperform the market in the next five years, supported by solid fundamentals and attractive valuation [11][12]