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UBER, cashflow turning positive, a 29% higher target price
Current 38 Target 49 +29%
December 16th 2021
1 minute read
Sales jumped 23%
Costs 17 points lower, negative profit from non cash costs, predicting profit ahead
Cashflow positive (helped by working capital), forecast higher
Balance sheet, higher leverage
Valuation, cashflow turning positive, a 29% higher target price
1 minute read
Sales jumped 23%
- Sales jumped 23% in the third quarter to 4,845 million dollars vs our 4,125 million dollars forecast.
- This brings the quarterly average to 16% growth.
- We predict continued strong average growth of 8% in this next 12 months to bring sales to 6,415 million dollars in the third quarter of 2022.
Costs 17 points lower, negative profit from non cash costs, predicting profit ahead
- The cash cost ratio was 13 points lower at -103% in the third quarter giving a -2,439 million dollars net profit with high non cash costs.
- The average cost ratio is at -120% now.
- We use a lower -87% cost ratio as sales rise to predict a big 1,008 million dollars profit in the third quarter of 2022.
Cashflow positive (helped by working capital), forecast higher
- Free cashflow was positive 466 million dollars in the third quarter with -90 million dollars investment spending.
- Average quarterly Cashflow is at -426 million dollars now.
- We assume lower -73 million dollars investment spending which with higher sales gives a higher 674 million dollars Cashflow in the third quarter of 2022.
Balance sheet, higher leverage
- Cash increased from 4,443 to 6,482 million dollars in the third quarter.
- Liabilities increased from 20,507 to 22,599 million dollars so net cash worsened from -16,064 to -16,117 million dollars
- With our forecast cashflow & a -1,137 million dollars equity payout net cash will be -14,569 million dollars in 12 months time.
Valuation, cashflow turning positive, a 29% higher target price
- UBER capital from the last 15 quarters worsened to -16,922 million dollars in the third quarter with -1,614 million dollars new liabilities but will be -14,468 million dollars in12 months time.
- At the current market value of 73,390 million dollars based on our forecasts it’s at 1.93 X assets with an 11 years payback & a 2% yield.
- Our 12 month Cashflow forecast is 2,696 million dollars which means an 27 X valuation. A 35 X valuation gives a 29% higher target price of 49 dollars.
