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UBER, heading to cash flow positive
Target price USD59.6
Last 12-month cashflow -USD 3.36 billion

March 4th,, 2021
1 minute read

Sales
  • Sales inched up 1% in the fourth quarter to USD 3.17 billion which was 7% below our forecast. This is after strong third quarter growth of +40%.
  • Average quarterly sales growth is now at -2%.
  • We expect average growth to turn positive 8% in this next 12 months & sales to reach USD 4.3 billion by the fourth quarter 2021.

Cashflow
  • Cashflow was negative -USD 928 million in the fourth quarter from -USD 537 million in the third on negative working capital.
  • Average quarterly Cashflow is -USD 840 million.
  • We expect lower investment spending USD 90 million from USD 123 million in the third quarter which with higher sales gives an average quarterly Cashflow USD 83 million this next 12 months.

Sales growth to turn positive, cashflow too on lower investment spending, slightly higher target price...

Balance sheet
  • The balance sheet leverage of cash minus total liabilities was -USD 13.85 billion in the fourth quarter up from -USD 12.56 million in the third quarter & -USD 5.7 billion a year ago.
  • With our forecast for free cashflow to turn positive & a USD 138 million dividend...
  • ...net cash will improve to -USD 13.66 billion in 12 months time.

Profit
  • The net loss improved to -USD 962 million in the fourth quarter from -USD 1.1 trillion in the third quarter.
  • The cash cost ratio of net profit add non cash costs minus sales as a percent of sales improved to 113%.
  • We use an average 97% cash costs to predict a lower next 12 months loss of -USD 715 million.

Value
  • UBER has raised total net capital of USD 15 trillion in the last three years!
  • At the current market value of USD 104 billion, it’s valued at 7X sales, 3X assets, 8X equity.
  • Our free cashflow forecast is now USD 331 million. At a high 0.3% Cashflow valuation with no adjustment, this gives a slightly higher target price of USD59.6.